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UTES ETF marks first year of operation


The Reaves Utilities ETF (UTES), the only actively managed and fully transparent utilities exchange traded fund, has marked its first full year of management.

The fund’s managers have employed a relative value strategy to focus on distinctive opportunities in the utilities sector that have the potential for consistent earnings growth in the long term. 
UTES had a total return, including reinvested distributions, of 29.02 per cent in its first full year of operations which outperformed its benchmark by 321 basis points. The fund's total annual operating expense is 0.95 per cent. 
Reaves' UTES portfolio managers actively manage issues and unintended risks often inherent in a passive utilities benchmark. This active strategy has allowed for Reaves' managers to navigate factors such as complex regulation, and seeks to protect the funds from exposure to risk from commodities and foreign exchange.
"After one year, we are confident that our active approach in managing UTES has helped us deliver a strong return with what we believe is less risk than our peers," says John Bartlett, UTES's co-portfolio manager at Reaves Asset Management. "More importantly, though, we look forward to generating superior value for our investors over the long term."
UTES is fully transparent and invests in utilities without regard to market cap or dividend yield, as it seeks to deliver risk-adjusted total returns.
"In our first year of UTES's operations, Reaves has utilised its industry experience and proprietary research to include utilities firms that we believe have a forecast for growth at below-market risk," says UTES's co-portfolio manager Jay Rhame. "We believe that the portfolio offers the opportunity for consistent earnings and dividend growth, potentially offering a more attractive income opportunity over time than fixed-income alternatives."
Entering its second year of operations, Reaves Utilities ETF intends to continue to invest in securities across the utilities sector, including but not limited to firms that participate in electrical distribution and transmission, gas distribution, water distribution, independent power producers and YieldCos, as well as vertically integrated and traditional utilities.

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