Invesco PowerShares and the Select Sector SPDRs have come to an agreement in a dispute over the use of similar tickers, with PowerShares voluntarily changing the symbols for its nine S&P SmallCap Sector ETFs. In April 2010 PowerShares launched a series of sector-specific funds focusing on small cap stocks. While the Select Sector SPDRs focus on large cap stocks, the PowerShares small suite carves up the S&P SmallCap 600 Index into nine major sectors (there are some other differences between the funds as well, such as the treatment of telecom stocks).
The ticker symbols for the suite of products were similar to the established Sector SPDRs; the letter “S” was added to the tickers for the Select Sector SPDRs (the small cap financials ETF, for example, is XLFS, while the Select Sector Financial SPDR is XLF). The Select Sector SPDRs were launched in late 1998.
A few months after the launch of the small cap sector funds, SPDR filed a lawsuit against PowerShares calling the similar tickers a “deliberate and unconscionable act on the part of PowerShares to confuse both institutional and retail investors.” Ben Fulton, Invesco PowerShares managing director of global ETFs, commented on the resolution in a press release:
ETFs have proven to be an extremely valuable tool for sector investing, as indicated by the investor interest in the sector ETFs of both Invesco PowerShares and Select Sector SPDRs. Our intent, when we selected the original tickers was not to confuse, but simply to make it easier for S&P Sector investors to identify the tickers of the new Small Cap S&P Sector ETFs. We have worked closely with the Select Sector SPDR Board and understand their perspective on the matter. We were amenable to their proposal because the PowerShares S&P Small Cap Sectors have filled a significant gap in the market and have been very well received by investors.
Beginning in late March, the PowerShares SmallCap Sector ETFs will begin trading under new ticker symbols:
|Sector||Old Ticker||New Ticker|
|Utilities & Telecom||XLUS||PSCU|
“Both parties agree that in the interests of investors, the best course of action is to work together to make the changes,” noted Dan Dolan of Select Sector SPDRs. “We appreciate Invesco PowerShares’ willingness to work with Select Sector SPDRs and are eager to move ahead as we continue to provide investors powerful ways to express their investment convictions on sectors of the U.S. stock market.” added Dolan.
Disclosure: No positions at time of writing.