Select Sector SPDR Trust Sues Invesco Over ETF Symbols

The manager of the Select Sector SPDR exchange-traded fund family is suing Invesco Ltd. (IVZ) over its use of similar trading symbols for its PowerShares ETFs.

The complaint by the the Boston-based Select Sector SPDR Trust accuses PowerShares Exchange-Traded Fund Trust II, Invesco PowerShares Capital Management LLC and Invesco of trademark infringement and misappropriation. It was filed Thursday in U.S. District Court in Houston.

In April, Invesco began marketing its PowerShares ETFs, which trade on the Nasdaq stock exchange, using ticker symbols which begin with "XL." Select SPDR funds have used the same convention since 1998, the lawsuit said. It called the symbols adopted by the PowerShares ETFs "confusingly similar" and damaging to the value of the Select Sector SPDR ETFs.

Invesco adopted the symbols "with the intent to obtain free publicity for its new and untested ETFs," the suit alleged. The trust asked that the PowerShares ETFs be required to change the symbols and asks reimbursement for the cost of the suit.

Ivy McLemore, a spokesman for Invesco, said it was company policy not to comment on litigation.

Nine Select Sector SPDR ETFs, which hold shares of companies in the Standard & Poor's 500 Composite Stock Index, are identified with the "XL" symbol. For example, its consumer discretionary ETF trades under the symbol XLY and its consumers staples ETF trades under XLP.

PowerShares is seeking "to confuse both institutional and retail investors," said Dan Dolan, director of wealth management strategies for the Select Sector SPDR Trust at ALPs Distributors Inc. He called the Select Sector SPDR ETFs the "clear leader" among sector ETFs with $31 billion in assets in the nine funds. "I don't think there's any other way of looking at it than they're trying to jump on our back."

The nine PowerShares funds, which also use the "XL" symbol, track a subset of companies in the Standard & Poor's 600 Composite Stock Index, a small-cap index. PowerShares S&P SmallCap Consumer Discretionary Portfolio trades under the symbol XLYS, and PowerShares S&P SmallCap Consumers Staples Portfolio trades under XLPS.

The complaint notes that previous Powershares ETFs did not use the "XL" symbol. Of 102 funds launched earlier, 101 begin with a "P," the complaint notes.

-By Daisy Maxey, Dow Jones Newswires; 212 416 2237; [e-mail]