PowerShares says wins SEC nod for active ETFs

BOSTON, Feb 27 (Reuters) - PowerShares Capital Management said on Wednesday it won conditional regulatory approval for four actively managed exchange-traded funds (ETFs), becoming the first firm to get the green light for the products.

PowerShares, a unit of U.S. money manager Invesco Ltd (IVZ.N), said in a statement the U.S. Securities and Exchange Commission (SEC) has granted "exemptive relief" to four equities and fixed income ETFs.

"This is an important milestone for the ETF industry," Bruce Bond, president and chief executive of PowerShares, said in the statement.

ETFs are mutual funds that track indices and, like stocks, trade on exchanges. They have become hugely popular in recent years partly because of their low costs.

According to U.S. fund industry trade body Investment Company Institute, ETF assets grew four-fold to $608 billion at end-2007 from $151 billion at end-2003 and the number of ETFs jumped more than five-fold to 629 from 119.

To tap the growth, ETF firms are launching innovative products, and actively managed ETFs are the latest variations. Barclays Global Investors (BGI), the biggest ETF firm in the world, has filed for approval with the SEC two actively managed ETFs. BGI is the funds arm of British bank Barclays PLC (BARC.L).

And State Street Global Advisors (SSgA), the second-biggest ETF firm, said on Wednesday it has filed with the SEC for approval of a series of actively managed ETFs.

"Our application for these actively managed ETFs was filed to meet increasing demand among our clients," said James Ross, SSgA's senior managing director. SSgA, a unit of financial firm State Street Corp (STT.N), launched the first U.S. ETF -- the SPDR Trust -- in 1993.

(Reporting by Muralikumar Anantharaman, editing by Richard Chang)