ETF Watch: New Elkhorn Sector Funds Complement SPDRs

December 30, 2016

Elkhorn is set to more than double the number of listed products bearing its name today with the launch of nine midcap sector ETFs. The funds use the same sector structure as the original nine Select Sector SPDRs, and the nine complementary small-cap ETFs that Invesco PowerShares launched in 2010.

The new Elkhorn funds are listing on the Bats Exchange, and each comes with an expense ratio of 0.29%. Bats Global Exchanges is the owner of ETF.com.

The launching ETFs are as follows:

  • Elkhorn S&P MidCap Consumer Discretionary Portfolio (XD)
  • Elkhorn S&P MidCap Consumer Staples Portfolio (XS)
  • Elkhorn S&P MidCap Energy Portfolio (XE)
  • Elkhorn S&P MidCap Financials Portfolio (XF)
  • Elkhorn S&P MidCap Health Care Portfolio (XH)
  • Elkhorn S&P MidCap Industrials Portfolio (XI)
  • Elkhorn S&P MidCap Information Technology Portfolio (XK)
  • Elkhorn S&P MidCap Materials Portfolio (XM)
  • Elkhorn S&P MidCap Utilities Portfolio (XU)

The three families of ETFs all derive from subsets of the S&P 1500 Index. The Select Sector SPDRs, of course, track subsets of the S&P 500, while the PowerShares funds are tied to subsets of the S&P SmallCap 600 Index. The new Elkhorn funds, meanwhile, track subsets of the S&P MidCap 400 Index, filling the void between the two older families.

All three families combine the telecommunications and technology sectors into one sector. However, it should be noted that earlier this year, real estate was broken out from the financials sector into an eleventh sector in the Global Industry Classification Standard and that move was echoed by the Select Sector SPDRs. The Real Estate Select Sector SPDR (XLRE) launched as the tenth fund in the family in 2015 and currently has $2.3 billion in assets under management.

The PowerShares family of small-cap sector ETFs has not added a real estate fund, and the new Elkhorn ETFs do not include one either.

The Elkhorn ETFs are also the only sector funds to specifically target the midcap space.

Legg Mason Adds Infrastructure ETF
Legg Mason is also squeaking one last fund launch through before year’s end, with the rollout of the Legg Mason Global Infrastructure ETF (INFR) on the Nasdaq stock exchange. The fund is the firm’s seventh ETF and comes with an expense ratio of 0.53%.

INFR tracks the RARE Global Infrastructure Index, which covers companies selected from the MSCI ACWI All Cap Index. The categories covered by the fund’s index include energy-related and water utilities, energy producers and traders, multi-utilities, renewable electricity, airport services, cable and satellite companies, railroads, certain types of REITs and companies that are involved with highways, rail tracks, ports, oil and gas storage, and transportation. Selected companies must have at least 60% exposure to infrastructure via earnings and revenue, the prospectus said.

INFR’s index selects its components based on market capitalization, volume, dividend yields and cash flow yields. It includes between 75 and 200 components.

There are currently seven global infrastructure ETFs listed on U.S. exchanges, the largest of which is the iShares Global Infrastructure ETF (IGF), which has $1.5 billion in assets under management and started trading in late 2007. IGF’s expense ratio is 0.47%.

Contact Heather Bell at [email protected].

 

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