A press release entitled, "PowerShares Launches Variable Rate Investment Grade Portfolio (​VRIG)," and subtitled, "PowerShares and Invesco Fixed Income (​IFI) partner on the first and only ETF with diversified exposure to multiple fixed income asset classes consisting of high-​quality variable and floating rate securities," says, "Invesco PowerShares Capital Management, LLC, a leading global provider of exchange-​traded funds (​ETFs), announced today the launch of PowerShares Variable Rate Investment Grade Portfolio (​VRIG). The ETF will be actively managed by IFI, which collectively has more than 34 years of experience in fixed income investing. With global interest rates at historical lows due to fiscal stimulus, VRIG offers investors a fixed income alternative that may benefit from rising short term rates. Rather than trying to time when interest rates may rise, the ETF seeks to be defensively positioned for higher short term rates, providing investors with the opportunity for current income." It quotes Dan Draper, Global Head of PowerShares, "With structural money market reform coming in October, we are pleased to be adding VRIG to our ETF lineup of variable rate products. Companies across the U.​S. have not experienced real rate increases for years, but with Libor rising they may have to pay higher rates on their loans while new money market rules could also slow demand for short-​term debt." The release adds, "​The addition of VRIG expands PowerShares industry leadership position with more than $​6B in assets under management (​AUM) in floating and variable rate ETFs. VRIG will focus on investment grade assets with ample liquidity across a broad spectrum of asset classes. Broadly, the ETF will focus investments in floating rate US Treasuries, government sponsored agency mortgage-​backed securities, US Agency debt, structured securities and floating rate investment grade corporates.... VRIG will primarily invest in variable and floating rate investments, which have coupons that adjust with short term interest rates. Should short term rates increase, the variable rate coupons are designed to adjust upward and produce a higher yield. Conversely, should short rates decrease, the yield of variable rate securities will be lower. Additionally, as the result of their significantly lower durations relative to fixed rate bonds, prices of variable and floating rate bonds have generally fared better in rising rate environments."

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