PCA

Powershares recently launched a new class of ETFs. One of them is PCA (PowerShares Autonomic Balanced NFA Global Asset Portfolio). I feel this might be an interesting start for a new set of ETFs to come to the market.

First autonomic is word derived from autonomy (meaning self-government). So the rebalance is driven entirely by self-control.

Second, NFA stands for New Frontier Advisors, which is a Boston-based institutional research and investment advisory firm. The firm started by Richard Michaud who wrote a book in 1998 “Efficient Asset Management: A Practical Guide to Stock Portfolio Optimization and Asset Allocation.”

The ETF carries a management fee of 0.25% above the average management fees of 0.5% for the underline ETFs included in this ETF. So the total management fee is about 0.75%, which is comparable with most balanced mutual funds.

PCA holdings are 30% US equity, 32% international equity, 40% fixed income, and 3% currency and commodity. There are about 27 ETFs in this ETF. Most of the ETFs are Powershares ETFs.

The trading volume is very thin now.