Vident Launches Multifactor Real Estate ETF
Vident Financial LLC has injected the multifactor approach into what it says is traditionally a market-cap-weighted sector with the launch of the PPTY—U.S. Diversified Real Estate ETF (PPTY). Vident says it does a deep-dive analysis of the properties held by the real estate companies in the fund’s underlying rules-based index in order to build a portfolio that’s diversified by location and property type. It also favors companies with prudent leverage, as measured by the debt-to-enterprise value ratio of real estate investments. Individual securities are capped at 4% during the index’s semiannual reconstitution and rebalancing.
Regarding the location of properties, the fund’s index sets stable geographic targets to deliver diversification within each property type. As for property diversification, the index applies fixed allocations to each property type to ensure sufficient diversification. The largest allocations are to core property types such as residential, office, industrial, retail and the “diversified” category because of their established track records of delivering stable income, inflation protection and growth.
The expense ratio is 0.53%.
Cboe Vest ETF Aims To Top Yield Of S&P 500
In an attempt to add some juice to a lackluster yield environment, Cboe Vest Financial LLC has introduced an exchange-traded fund that aims to provide annualized income of roughly 3% over the annual dividend yield of the S&P 500 index. The Cboe Vest S&P 500 Dividend Aristocrats Target Income ETF (KNG) follows an index that tracks an equal-weighted portfolio of optionable stocks in the S&P 500 Dividend Aristocrats index.
The KNG fund’s strategy entails buying stocks in the S&P 500 Dividend Aristocrats and writing, or selling covered call options on a partial amount of each stock each month. The indicated dividend yield on the S&P 500 was recently 2%, which means KNG would generate income of about 5% if its strategy works as advertised. The fund’s strategy would never write options on more than 20% of the portfolio, however, and the strategy historically has kept that in the range 6% to 15%.
KNG’s expense ratio is 0.75%.
Direxion Debuts “Leveraged Lite" ETFs For Advisors