Legg Mason, begun trading a new global infrastructure ETF, the Legg Mason Global Infrastructure ETF (Nasdaq: INFR), on Friday, December 30, 2016. Here is a synopsis of the new ETF:
|Name: Legg Mason Global Infrastructure ETF
|Net Expense Ratio: 0.53%
The Legg Mason Global Infrastructure ETF seeks to track the investment results of the RARE Global Infrastructure Index.
The RARE Global Infrastructure Index is constructed from global infrastructure-related equity securities. The Underlying Index utilizes a proprietary methodology created and sponsored by RARE Infrastructure (North America) Pty Limited (RARE), the fund’s subadviser. RARE is affiliated with both LMPFA and the fund. Securities that compose the Underlying Index include depositary receipts representing securities in the Underlying Index.
The Underlying Index is composed of equity securities in developed and developing markets that are included in the MSCI ACWI All Cap Index. Companies in the MSCI ACWI All Cap Index are screened to include only companies within the following Global Industry Classification Standard (GICS) sub-industries and are classified into infrastructure sectors as follows:
|Utilities Infrastructure Sector
|Economically Sensitive Infrastructure Sector
|Cable & Satellite
|Independent Power Producers & Energy Traders
|Highways & Railtracks
|Marine Ports & Services
|Oil & Gas Storage & Transportation
|Specialized Real Estate Investment Trusts (REITs)
The Underlying Index applies multiple screens to select securities that provide investors with exposure to securities that most closely match RARE’s definition of infrastructure. Factors used to select the securities include:
Market capitalization and average daily volume
Forward looking dividend yields
Operating cash flow yield
The subadviser believes that companies that score high on the screens applied by the Underlying Index should be considered high quality companies. The infrastructure exposure score is calculated using revenue, earnings, earnings before interest, tax, depreciation and amortization, and similar measures to include only those companies that
have more than a 60% exposure to infrastructure, including utilities. The infrastructure exposure score of each company in the Underlying Index will be calculated at least on an annual basis. Each company within the Underlying Index is given a weight based on its market capitalization adjusted by its infrastructure exposure and security price volatility. The weight of each sector in the Underlying Index will range from 40% to 60% and will be adjusted quarterly based on movements in the OECD G7 Leading Indicators Index, which attempts to identify trends in the economic cycle.
RARE anticipates that the number of component securities in the Underlying Index will range from 75 to 200. Companies in the Underlying Index are assigned to 4 regions: Asia Pacific, Emerging Markets, Europe and North America, with no region exceeding 50% of the Underlying Index. A company is assigned to a region based on its listing domicile. A company’s regional economic exposure may be different from its listing domicile. Companies in the Underlying Index are currently from approximately 23 countries, including Australia, Brazil, Canada, Chile, Finland, France, Germany, Hong Kong, Italy, Japan, Malaysia, Mexico, Netherlands, New Zealand, Portugal, Qatar, Singapore, South Korea, Spain, Switzerland, Thailand, United Kingdom and United States. The countries represented by companies in the Underlying Index may change from time to time due to market conditions.
As initially constituted and balanced, no individual security in the Underlying Index will exceed 5%, and no individual security may have a weight of less than 0.10%. The Underlying Index’s securities are reconstituted quarterly and rebalanced quarterly. The Underlying Index is reconstituted on different dates from the MSCI ACWI All Cap Index. The fund’s securities portfolio is rebalanced when the Underlying Index is rebalanced or reconstituted. The composition of the Underlying Index and the fund after reconstitution and rebalancing may fluctuate and exceed the above Underlying Index limitations due to market movements and other factors. The components of the Underlying Index, and the degree to which these components represent certain sectors and industries, may change over time.
Fund Top Holdings (01/06/17):
|UNION PACIFIC CORP
|NATIONAL GRID PLC
|SSC GOVERNMENT MM GVMXX
|DUKE ENERGY CORP
|NORFOLK SOUTHERN CORP
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