Among big issuers PowerShares was always something of a black sheep.

Where other major issuers would aim to provide simple "buy the index" funds, PowerShares claimed to be "leading the Intelligent ETF Revolution". Where the other issuers put plain vanilla funds at the heart of their business, PowerShares always preferred a different flavour.

The strategy worked.

PowerShares most popular product has always been QQQ, which tracks the NASDAQ. PowerShares beat other issuers to the index precisely because, despite its fame, it is not plain vanilla.

As most investors know, NASDAQ has a heavy technology tilt. So heavy is this tilt that ETFs tracking it cannot be listed in Europe, as Europe's UCITS regulations require more sector diversification than NASDAQ provides.

A similar outlook - which overlooked plain vanilla - also meant that PowerShares got into smart beta ETFs early. And to date, the company still has the reputation as ahead of the game on smart beta products.

But now PowerShares seems to be changing.

The company has made filings in the US for several new ETFs, all of are plain vanilla. Whereas PowerShares reputation is strongest in the smart beta space - these new listings all fall under the PureBeta heading - meaning they track popular benchmarks without frills.

The new products are:

  • PowerShares PureBeta MSCI USA Portfolio (PBUS)
  • PowerShares PureBeta MSCI USA Small Cap Portfolio (PBSM)
  • PowerShares PureBeta FTSE Developed ex-North America Portfolio (PBDM)
  • PowerShares PureBeta FTSE Emerging Markets Portfolio (PBEE)
  • PowerShares PureBeta 0-5 Yr US TIPS Portfolio (PBTP)
The underlying indexes are familiar faces, like the MSCI USA Index and FTSE Emerging Index.

So what's going on? Why is PowerShares entering the plain vanilla space? And why now?

One answer might be that PowerShares is trying to climb further up the issuer ladder. Right now, PowerShares is the fourth largest in the US by total assets. Maybe listing some plain vanilla funds, if late in the game, will help them get higher. After all, every other top issuer already has funds like this and the vast majority of assets around the world that sits in ETFs sit in plain vanilla funds.

But the most likely possibility is that PowerShares wants to diversify and lower the volatility that comes with QQQ.

Consider this. Almost half of its PowerShares' assets sit in QQQ -- $53bn of a total $129bn. The high concentration is not exclusively a bad thing. Most issuers can only dream of collecting $53bn in assets, let alone in a single product. And QQQ's popularity is understandable considering its a high-quality and highly liquid product.

But if QQQ has a downside it's that it experiences huge average daily trading volumes. Despite the NASDAQ's popularity and the fund's cheap fees, QQQ remains held for short terms and held mostly by traders.

So setting up plain vanilla ETFs might help offset this. And it might help PowerShares to have some funds that simply sit still and hold assets.