ProShares, the Bethesda, MD based issuer known for its inverse and other alternate range of exchange traded funds, expanded its lineup of traditional ETFs with the launch of the ProShares DJ Brookfield Global Infrastructure ETF (TOLZ).
The new fund offers exposure in the global infrastructure equity space, which is expected to witness trillions of dollars in investments by governments across the world in an effort to reignite growth post recession.
According to infrastructurereportcard.org, America alone would require $3.6 trillion in infrastructure investments. Emerging markets, including Brazil and India, are expected to spend trillions of dollars before the end of this decade.
TOLZ tracks the Dow Jones Brookfield Global Infrastructure Composite Index, a market capitalization weighted gauge comprised of global companies that can be viewed as pure infrastructure firms. Nine groups from developed and emerging markets, including master limited partnerships, within the infrastructure industry are targeted by the fund. The index comprised of 121 companies as of 31 December, 2013 with a weighted average market cap of $20 billion.
To be considered for the index, a company must get 70 percent of its estimated cash flows from airports, toll roads, ports, electricity transmission and distribution, communications, water, or transportation and storage of oil & gas. As of the first week of April, the US dominated the index with nearly 50 percent of the weight, followed by the UK and Canada with more than 11 percent each.
In terms of exposure, storage and transportation of oil and gas dominates the fund at 30.47 percent of total assets, followed by electricity transmission and distribution (19.66 percent), MLPs (18.71 percent), and communications (11.13 percent). Five other groups get single-digit exposure.
Individually, UK-based electricity transmission company National Grid gets the top billing, while Enbridge Inc and American Tower make up for the remaining two in the top three.
TOLZ has a dividend yield of 3.88 percent, which after adjusting for the fund’s 0.45 percent expense ratio, puts the yield at 3.43 percent. That could be suitable for investors seeking exposure in moderately defensive sectors like infrastructure, which ensures dividend yield as well as modest capital appreciation.
Disclosure: No holdings
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