Daily ETF Watch: New Infrastructure ETF

March 27, 2014

ProShares’ global infrastructure ETF launches today.

ProShares today is launching a new global infrastructure fund, according to an NYSE communique, reflecting the investment market’s need for steady income at a time when bond yields remain rather low and the threat of rising inflationary pressures could lead to capital losses in fixed-income markets.

The ProShares DJ Brookfield Global Infrastructure ETF (TOLZ) will track the performance of the Dow Jones Brookfield Global Infrastructure Composite Index, which consists of companies that own and operate infrastructure assets, activities that generally generate long-term stable cash flows, according to a regulatory filing.

Yields continue to be a major theme for investors in 2014 as it was in 2013 when the S&P 500 Index surged by more than 30 percent. This year, industry observers are expecting a correction in the equity markets, making yield and defensive plays a key strategy in investors’ playbooks going forward.

Companies in the fund manage infrastructure assets such as airports, toll roads and ports, among other assets. The fund has an annual expense ratio of 0.45 percent, or $45 for every $10,000 invested.

Filings

  • PowerShares has put into registration an active alternative ETF that seeks low correlation to the broader markets at a time when market observers are expecting a pullback in broader markets.

The S&P 500 Index is up about 0.5 percent year-to-date after a 32 percent surge last year. Alternative strategies seek to dampen volatility when markets experience wild swings but trail broader markets during big run-ups.

For example, the IQ Hedge Multi-Strategy Tracker ETF (QAI | C-70) is up 0.4 percent year-to-date and 5.5 percent in 2013.

The PowerShares Multi-Strategy Alternative Portfolio will invest in a combination of equity securities, futures contracts and other securities using long/short and other alternative investment strategies, according to its regulatory filing.

Associated fees and tickers were not yet available for the proposed fund.

  • Solactive AG has launched the Solactive MLP Bond Index, which the company is touting as a first-to-market index that gives investors access to yields and a safe haven from riskier corners of the energy market at a time when investors are grappling for yields.

The index is composed of all bonds issued by master limited partnership companies that have an amount outstanding of at least $250 million and a remaining time to maturity of at least 12 months, the Frankfurt, Germany-based company said in a press release.

The weighting is capped at 20 percent per issuer and the index is rebalanced quarterly. Currently, the index has 96 components and a yield to maturity of 3.99 percent.

 

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