A partnership between Tierra Funds, ETF Managers Group, ISE ETF Ventures, and XP Gestao de Recursos, an XP Group company begun trading the Tierra XP Latin America Real Estate ETF (NYSE Arca: LARE) on Thursday, December 03, 2015.
Here is a synopsis of the new ETF:
FUND INFORMATION:
| Symbol: LARE | Exchange: NYSE Arca |
| Name: Tierra XP Latin America Real Estate ETF | Net Expense Ratio: 0.79% |
FUND OBJECTIVE:
The Tierra XP Latin America Real Estate ETF seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Solactive Latin America Real Estate Index.
REFERENCE INDEX:
The Solactive Latin America Real Estate Index x tracks the performance of companies actively involved in the Latin American real estate sector that derive the majority of their revenues from the operation of real estate and real estate services in the Latin America region. The Index consists of exchange-listed common shares and depositary receipts of Latin American companies in 4 categories:
• Listed real estate investment trusts (REITs) or the locally-listed regulatory equivalent that distribute substantially all of their income to their shareholders pursuant to local laws. These include Mexican “FIBRAs” and Brazilian “FIIs”, which may be organized as closed-end investment companies (CEFs).
• Real estate developers engaged in the sale of residential, commercial office, retail, industrial, and hospitality real estate or certain real estate-related infrastructure developments (e.g., industrial parks, planned residential communities, airports).
• Companies that own income producing multifamily, commercial office, retail, industrial, and hospitality real estate or Infrastructure Developments.
• Service providers that derive a majority of their revenue from activities directly related to real estate or Infrastructure Developments.
Companies meeting the above criteria are screened for investibility (e.g., must not be listed on an exchange in a country which
employs certain restrictions on foreign capital investment), a minimum market capitalization, and liquidity (i.e., average trading
volume). The companies in the Index are weighted based on their market capitalization, liquidity, and dividend yield, such that the larger a company’s market capitalization, the greater its liquidity, and the higher its dividend yield, the larger its weighting in the Index. At the time of each reconstitution, no single Index component will represent more than 20% of the weight of the Index, and the cumulative weight of all components with an individual weight of 5% or greater will not in the aggregate account for more than 50% of the weight of the Index.
The Index is owned by Solactive AG and calculated and maintained by Solactive. Solactive is responsible for final decisions regarding the composition of the Index as well as any amendments to the Index’s methodology. Although the Index methodology is expected to generally produce the set of Index constituents, Solactive may utilize subjective screening based on fundamental analyses or other factors if it believes that certain companies should be included or excluded from the Index notwithstanding the Index methodology. Solactive is independent of the Fund and its investment adviser, sub-adviser and distributor.
The Index is reconstituted quarterly at the close of business on the first Friday of March, June, September, and December. Whenever possible, changes to the Index are announced on Solactive’s website at least one trading day in advance of the actual change. The Index is not limited to a minimum or maximum number of constituents; rather, it includes all companies meeting the eligibility criteria for inclusion in the Index. The Index may include companies of any market capitalization, including small capitalization companies.
Top Holdings (11/16/15):
Symbol |
Name |
Weight |
| FUNO11 | FIBRA UNO ADMINISTRACION SA | 3.83% |
| GAPB | GRUPO AEROPORTUARIO DEL PACIFICO SA DE CV | 3.81% |
| FIBRAMQ | MEXICO REAL ESTATE MANAGEMENT SA DE CV | 3.71% |
| TERRA13 | TF ADMINISTRADORA INDUSTRIAL | 3.63% |
| BBPO11 | BB PROGRESSIVO II FII | 3.45% |
| BRCR11 | FII BTG PACTUAL CORPORATE OFFICE FUND | 3.42% |
| KNCR11 | KINEA RENDIMENTOS IMOBILIARIOS FII | 3.24% |
| MRVE3 | MRV ENGENHARIA E PARTICIPACOES | 3.24% |
| OMAB | GRUPO AEROPORTUARIO DEL CENTRO NORTE S A B DE C V | 3.20% |
| HGRE11 | CSHG REAL ESTATE FI IMOBILIARIO | 3.18% |
Country Breakdown (11/16/15):
| Brazil | 58.1% |
| Mexico | 39.0% |
| Chile | 2.9% |
Useful Links:
LARE Home Page
Category: Real Estate> Regions> Latin America Real Estate
ETFtrack Comment:
Here is a comment from James Anderson, Managing Partner at Tierra Funds:
“LARE offers investors both current income and growth potential as well as access to local real estate equities that are otherwise not available in competing products. Favorable demographics, continued economic integration, and expanding local capital markets suggest that Latin America real estate may be a compelling addition to a portfolio.”