In response to investor demand, PowerShares Canada Wednesday announced the listing of three new smart beta exchange-traded funds (ETFs) on the Toronto Stock Exchange (TSX). Two of the ETFs are the first of their kind to be listed in Canada.

All three ETFs have now closed the initial offerings of units and are now available for trading on TSX.

“These distinct offerings truly demonstrate the diversity of smart beta strategies,” says Jamie Kingston, senior vice president, product management and development, Invesco Canada. “Not only do they break the link between price and portfolio weight, but they provide investors with unique strategies to achieve a variety of investment objectives.”

PowerShares Low Volatility Portfolio ETF (TSX:PLV) is the first Canada-listed global asset allocation ETF to employ a low-volatility strategy in both its fixed income and equity allocations. The fund is actively managed by Invesco Advisers, Inc., and it seeks to generate capital growth and modest income over the long term by investing, directly or indirectly, primarily in global equity securities and fixed-income securities.

Invesco Advisers will apply a proprietary investment process that analyzes the risks associated with the following asset classes in the following benchmark target allocations: 30% Canadian short-term bonds; 20% Canadian equity securities; and 50% global equity securities.

The portfolio will be rebalanced on a monthly basis.

“For investors concerned about volatility but seeking to maintain equity-market exposure, a low-volatility strategy may help reduce downside risk,” says Kingston. “PLV also provides exposure to shorter-term bonds, which are less sensitive to interest-rate changes and may provide a good defence against rates eventually rising.”

PowerShares Global Shareholder Yield ETF (TSX:PSY) represents another first in the Canadian ETF market, delivering exposure to U.S. and international equities of companies with a strong track record of returning free cash flow to shareholders.

“Companies typically return free cash flow to shareholders in one of two ways: share buybacks and dividends,” says Kingston. “PSY gives investors exposure to both in a globally diversified equity portfolio.”

The fund seeks to generate income and capital growth over the long term by investing, directly or indirectly, primarily in equities from developed markets globally. To achieve this, the fund will hold securities of four PowerShares ETFs in the following strategic target allocations: 25% PowerShares Dividend Achievers Portfolio (NYSE Arca:PFM); 25% PowerShares International Dividend Achievers Portfolio (NYSE Arca:PID); 25% PowerShares BuyBack Achievers Portfolio (NYSE Arca:PKW); and 25% PowerShares International BuyBack Achiever Portfolio (NYSE Arca:IPKW).

This strategy is also available for purchase in U.S. dollars, listed on TSX as PSY.U.

PowerShares FTSE RAFI Global Small-Mid Fundamental ETF (TSX:PZW) seeks to generate capital growth over the long term by investing, directly or indirectly, primarily in equities of small- and medium-sized companies from developed markets globally.

In order to achieve its investment objective, the fund will hold securities in two PowerShares portfolios in the following strategic target allocations: 50% PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (Nasdaq:PRFZ) and 50% PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio (NYSE Arca:PDN).

“By breaking the link between price and portfolio weight, fundamental index strategies do not allow the market to dictate the weight a stock receives in an index,” says Kingston. “An index based on corporate fundamentals is less susceptible to speculation than an index based solely on market capitalization.”

The investment objectives of these underlying funds is to seek investment results that generally correspond (before fees and expenses) to the price and yield of the FTSE RAFI US 1500 Small-Mid Index and the FTSE RAFI Developed ex US Mid Small 1500 Index, respectively (each, an “underlying index”).

This strategy is also available for purchase in U.S. dollars, listed on TSX as PZW.U.

The ability to purchase USD units is offered as a convenience for investors and will not act as currency hedge between the Canadian dollar and the U.S. dollar.

Toronto-based Invesco Canada Ltd. operates under three distinct yet complementary product brands — Trimark, Invesco and PowerShares.