IU: How have the enhanced indexes branded as the dynamic line using Intellidex methodologies been doing lately?

McRedmond: Some are performing particularly well and others are having more-challenging times. The standouts are the ones related to financials, particularly the PowerShares Dynamic Banking Portfolio (AMEX: PJB) and the PowerShares Dynamic Insurance Portfolio (AMEX: PIC). They've either had very little, or in some cases, completely avoided names that've been in the headlines in recent months. And that's what we'd hope from an ETF with an underlying index that has a methodology taking into account a variety of factors. As you probably recall, Dynamic Portfolios use quantitative systems to consider different types of risk, momentum and valuation factors to rank stocks. There are a total of 25 different factors involved in the process. By taking the universe of stocks and not owning every single one—and again, by using a quantitative methodology to screen by a number of fundamental and technical factors—you'd expect a lot more opportunities to remove stocks that are running into difficulties. And rebalancing and reconstituting portfolios on a quarterly basis provides more opportunities to make adjustments than a traditional market-cap-weighted index that rebalances and reconstitutes once a year.

IU: Invesco is launching a mutual fund using different PowerShares ETFs. Do you see more cross-marketing opportunities to work together in the future?

McRedmond: It's something we've been doing on a number of fronts, both on the sales and marketing side as well as the investment and product development side. Two of our actively managed ETFs are being subadvised by Invesco managers. That's something we definitely intend to continue to look at since Invesco has a great number of resources. They've certainly got an enormous amount of investment talent to leverage for our ETFs. While PowerShares has its own sales force, we're also leveraging off our counterparts on the Invesco side.

1 | 2 |