Products October 21, 2005

Powershares Introduces Two New ETF's

October 21, 2005 (PLANSPONSOR.com) - Those interested in investing in the increasingly popular Exchange Traded Funds (ETFs) now have two new choices.
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Powershares Capital Management LLC has introduced thePowerShares Lux Nanotech Portfolio.  

According to a news release t he PowerShares Lux Nanotech Portfolio is an exchange traded fund designed to track the Lux Nanotech Index, which is comprised of companies involved in developing, manufacturing and funding nanotechnology applications. The Lux Nanotech Index is based on the analytical framework developed by Lux Research, and is rebalanced and reconstituted quarterly.

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The company has also introduced thePowerShares Aerospace and Defense Portfolio.  

It is an exchange traded fund designed to track the SPADE Defense Index which is comprised of publicly traded companies focused on homeland and border security, space industry infrastructure, and technological innovations in warfare.    According to the announcement, companies within the SPADE index must trade for at least $5 a share, have a market capitalization of at least $100 million, and trade a minimum of one million shares a month. The SPADE Defense Index is a modified market-cap weighted index that is rebalanced quarterly and reconstituted annually.

Both funds will begin trading on the American Stock Exchange as of October 26.

ETFs have experienced increasing popularity as institutional investors look for options that provide diversification and lower costs (See The Bottom Line: Needful Things? ).

Compliance October 20, 2005

CA Tax Conformity Bill Excludes HSAs

October 20, 2005 (PLANSPONSOR.com) - Despite early indications that a new California law would make the Golden State's tax laws conform to the federal tax code when it came to taxing of health savings accounts (HSA), the bill does not make that change.
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A note on the Web site of California Assemblyman Johan Klehs, General Assembly sponsor of AB 115, said the measure would better conform the state’s tax practices to those at the federal level in areas such as deductions for child care and other related expenses.

Klehs said the measure also includes tax credits for costs related to retrofitting refineries to produce ultra-low sulfur diesel fuel and increased opportunity for members of the Armed Services serving outside of California to qualify for the Child and Dependent Care Credit.

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However, the Klehs note specifically mentions HSAs as not being in step with the federal Internal Revenue Code.

The bill as it was approved by the Legislature and signed into law by Governor Arnold Schwarzenegger is  here .

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