"At the time, dividends were the rave, but we had some investors that preferred investments that didn't have the tax consequences of dividends," says Ed McRedmond, Senior Vice President of portfolio strategies for Invesco PowerShares. "The Buyback Achievers Fund also seemed to be a nice complement to our Dividend Achiever Portfolio Fund ( PFM)."

The Buyback Achievers Fund is classified as a Large Blend Fund by Morningstar. This is the same peer group that ETFs that track the S&P 500 fall into such as the SPDRs ( SPY) and the iShares S&P 500 Index Fund ( IVV).

About two-thirds of the Buyback Achievers Fund is allocated to large cap stocks. The remainder of the fund is invested in mid cap and small cap names. It has approximately 310 holdings and the expense ratio is about 0.7%. The fund is rebalanced on a quarterly basis and reconstituted on an annual basis.

Complex Strategy Made Easy

One of the advantages of this ETF is that it simplifies what might otherwise be a cumbersome process.

"It would be difficult for individual investors to implement this strategy on their own," says McRedmond.

Also, "the Buyback Achievers Index is based on actual share repurchases rather than on announced share buybacks which may never materialize," says Bill Rogers, Director of Equity Analysis for Mergent.

This ETF would be one to consider for long-term investors who are more interested in capital appreciation, as opposed to dividend payments.

"Certain investors, for their own personal needs, would rather have the cash flow from dividends instead of having companies using that cash to repurchase shares," says McRedmond. "If your focus is on the cash flow from dividends, this ETF might not be at the top of your list."

One point for potential investors to keep in mind about the Buyback Achievers Fund is its composition.

"The index is weighted using a modified market cap weighting scheme so that no single holding can be more than 5% of the index on the annual reconstitution date," says Rogers. "And because buybacks are a company-specific event, the mix of companies will change over time, causing the investor to have a different sector mix from period to period."

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