The fund’s top sectors are electrical components and equipment; construction and engineering; steel; railroads; trading companies and distributors; and industrial machinery. The net expense ratio is 0.47%.
Much has been made about the age, inadequacy and various states of disrepair of vital infrastructure in the U.S. Most of the country’s infrastructure dates from the post-World War II period, and while nominal infrastructure spending has risen at an annualized rate of 3.6 percent during the past 15 years, Global X research has found that the number is actually minus 0.2% after accounting for inflation and real GDP growth.
Some people doubt the long-term prospects of Trump’s proposed infrastructure spending spree; in some circles, the plan is cast as a potential boondoggle. But Global X says infrastructure spending already has a jump start thanks to the Fixing America's Surface Transportation Act, otherwise known as the FAST Act, a $305 billion, five-year spending law signed by President Obama in December 2015 that aims to tackle a host of infrastructure needs across various sectors in the U.S.
Hartford Funds Launches Two Actively Managed Bond ETFs
Hartford Funds debuted two actively managed, fixed-income exchange-traded funds—the Hartford Quality Bond ETF (HQBD) and the Hartford Corporate Bond ETF (HCOR).
According to the company, the Hartford Quality Bond ETF seeks to maximize total return while providing a high level of current income consistent with prudent investment risk. The fund is a conservative core bond fund with an emphasis on investment-grade debt, including U.S. government and mortgage-backed securities. The expense ratio is 0.39%.
The Hartford Corporate Bond ETF offers corporate bond exposure through a bottom-up strategy of predominantly investment-grade corporate bonds and seeks to provide total return, with income as a secondary objective. It sports an expense ratio of 0.44%.
The funds are sub-advised by Wellington Management Company LLP.
Commodities In Focus
ProShares rolled out what it says are the first daily 3x leveraged and inverse crude oil exchange-traded funds. Both the ProShares UltraPro 3x Crude Oil ETF (OILU) and the ProShares UltraPro 3x Short Crude Oil ETF (OILD) are benchmarked to the Bloomberg WTI Crude Oil Subindex.
The OILU fund is used by investors seeking magnified gains when oil trends upward. Of course, results would also be magnified in the opposite direction if the benchmark goes south. The OILD fund is intended to hedge against declines in the benchmark by seeking to profit when oil prices drop.
Both funds are intended to be short-term bets on the price of oil, and both carry an expense ratio of 0.95%.
Elsewhere in commodities, ETF Securities launched three exchange-traded funds aimed at providing low-cost, broad exposure to commodities while making tax season easier for investors and their tax preparers.
The ETFS Bloomberg All Commodity Strategy K-1 Free ETF (BCI), the Bloomberg All Commodity Longer Dated Strategy K-1 Free ETF (BCD) and the Bloomberg Energy Commodity Longer Dated Strategy K-1 Free ETF (BEF) are structured as ’40 Act funds, which entail tax reporting with 1099 tax forms instead of the K-1 forms common in many types of commodity investment structures. K-1s can be a pain for investors and the people who do their taxes—typically financial advisors and accountants—because the forms are often sent late in the tax season after the taxes are filed, requiring additional work.
The BCI and BCD funds follow indexes composed of 22 commodities in five sectors, and sector exposure is capped at 33%. Both funds have expense ratios of 0.29%. BEF is tied to an energy-focused index consisting of crude oil, heating oil, unleaded gasoline and natural gas. Its expense ratio is 0.39%.
Finally, Direxion has brought to market the Direxion Auspice Broad Commodity Strategy ETF (COM), which tracks a rules-based index with exposure to 12 commodities. The index can go long on individual commodities when prices are rising, or can go to cash (or U.S. Treasury bills) on individual commodities when prices are falling. The goal is to have a lower risk profile than long-only commodity strategies.
The COM fund is structured as a ’40 Act fund, which means no K-1 tax form. Another highlighted feature is a “smart” contract roll approach designed to select cost-effective futures contracts to roll into upon expiration of the current contracts.
The fund’s net expense ratio is 0.70 percent.