Exchange Traded Concepts has filed for a second ETF that will be marketed under the Weatherstorm brand. The Weatherstorm Real Estate ETF focuses on companies that derive at least 85% of their income from property ownership or management.
The ETF’s underlying index then screens out companies that are externally managed or have low float levels and sorts them into one of nine buckets: office, residential, data center, industrial, hotel, self-storage, retail, health care or diversified. Each bucket has a predetermined weight.
Interestingly, although the fund is designed to provide diversified exposure to the real estate sector, it excludes nontraditional property categories such as infrastructure, casinos, billboards and prisons, according to the prospectus.
The index is also designed for geographic diversification, and each property type, with three exceptions, is assigned target weights for each of the country’s largest 15 metropolitan areas based on population and productivity levels. The methodology also lowers the weights of companies that have excessive leverage levels relative to their peers, the document said.
The index is rebalanced and reconstituted every six months.
The filing did not include a ticker or expense ratio, but it did indicate that the fund is set to list on the Nasdaq exchange.
The WeatherStorm Forensic Accounting Long-Short ETF (FLAG), the other fund falling under the brand, launched in 2013 and currently has $17.6 million in assets under management. It takes long or short positions in U.S. companies based on a scoring system that relies on six fundamental metrics.