ETF issuer First Trust has announced the launch of the First Trust Alerian Disruptive Technology Real Estate UCITS ETF (“DTRE”).
The firm writes that the Fund offers direct exposure to companies which provide the physical infrastructure underpinning the digital revolution, in a liquid, transparent format, with minimal overlap to the technology sector and broader indices. Listing on the London Stock Exchange, the Fund seeks to provide investors with investment results that correspond generally to the price and yield of the Alerian Global IT Real Estate & Infrastructure Index (the “Index”).
The Index is made up of companies listed on a recognised stock exchange and included in the GICS Real Estate within the S-Network Global Equity 5000 Index or the S-Network Global REIT index. The Index seeks to provide exposure to companies that own and lease real estate that support rapid data transfer, including the latest generation-capable cell towers and fibre-optic cable networks; distributed data handling, including data centre and cloud computing networks as well as E-commerce warehousing, including distribution and storage warehouses and logistics facilities.
The Index constituents are weighted by their float-adjusted market capitalizations, with the maximum weight of any stock comprising the Index limited to 10 per cent of the Fund’s net assets. The index employs a liquidity weighting methodology. At each evaluation, the index securities are classified as either Pure Play or Diversified by the Index Committee. The Pure Play securities are given a collective weight of 80 per cent and the Diversified securities are given 20 per cent in the index. The Index is rebalanced and reconstituted quarterly.
Rupert Haddon, Managing Director, First Trust says: “We are excited to be bringing this new ETF into our suite of award-winning thematic funds. Our focus has always been on offering products that offer clients access to untapped market segments, and DTRE forms the natural next step for our European business.
“Property investors have had issues for some time in Europe. For many, the scars are still raw following liquidity issues in the open-ended property market following the Brexit referendum. For others, we can understand the reticence in allocating to broad, market-cap weighted REITs, which are typically positioned within declining areas such as the high street or offices. DTRE could provide the solution to both of these issues.”
Haddon continues: “With the mass-adoption of Cloud, IoT, Robotics & AI and 5G as well as other disruptive technologies, in addition to accelerating digitisation, the growing need for infrastructure to support our digital activities and the immense amount of data behind them has become paramount. We are thrilled to be able to give our investors access to this ground-breaking infrastructure in a single UCITS portfolio.”
Robert Hughes, Chief Commercial Officer of Alerian says: “Consumer trends and behaviours are creating significant demand for continued enhancements to the infrastructure required to support an accelerating move towards a more digital reality. The launch of DTRE, based on the Alerian Disruptive Technology Real Estate Index (“LANDX”), allows us to expand our relationship with First Trust and deliver access to companies and ideas that are reshaping the global economy.”
The Fund is aimed at wealth managers, discretionary fund managers, advisers and institutional investors, with a total expense ratio of 0.60 per cent and base currency of USD. The Fund is rebalanced quarterly.