Exchange-traded funds (ETFs) continue to rack up assets as investors have come to realize their benefits for their portfolios.
While the bulk of that asset gathering has gone to passive, broad indexing strategies, it hasn’t stopped fund sponsors from trying new ideas on the investing public. This week, we get three new ideas that tackle some pretty interesting asset classes and sub-markets.
| Ticker | Name | Issuer | Launch Date | ETFdb.com Category | Expense Ratio |
|---|---|---|---|---|---|
| (TBLU n/a) | Tortoise Water Fund | 02/15/2017 | 0.40% | ||
| (XMX n/a) | WisdomTree Global ex-Mexico Equity Fund | 02/10/2017 | 0.30% | ||
| (FIXD n/a) | First Trust TCW Opportunistic Fixed Income ETF | 02/13/2017 | 0.55% |
Tortoise Jumps Into the Pool
Investment firm Tortoise Capital Advisors is best known as a manager of infrastructure assets – specifically honing in on master limited partnerships (MLPs) and pipeline stocks. It has a wide range of products and funds dealing with such holdings. A few years ago, it launched Tortoise Index Solutions to begin offering smart-beta ETFs and, since then, has grown its stable of ETFs. Building off of its success with MLPs and infrastructure, Tortoise has decided to launch an ETF that is a bit on the splashy side and perhaps even more boring than a crude oil pipeline. We’re talking about the exciting world of water stocks.
The Tortoise Water Fund (TBLU n/a) fits into the firm’s ‘steady wins’ mantra and will focus on those U.S. stocks that focus on water infrastructure or water management industries. While we have been down this road before – there are several water ETFs with multiple years of trading activity – TBLU is a tad bit special.
The fund will use a proprietary screening method to find those stocks that have real direct exposure to the water segment. Most firms in the water industry are industrial conglomerates that have some, but not 100%, focus on water. Filter companies also make products for hydraulic applications and water. Some pumping firms have more oil and gas revenues. TBLU hopes to eliminate that by focusing on investments that only have a high proportion of their revenues tied to the commodity. This should allow the new ETF to track the water sector, rather than these other businesses.
Targeting just water could give the ETF an edge in gathering assets from rivals. However, fervor for water investing has died down in recent years. Expenses for TBLU run at a cheap 0.40% or $40 per $10,000 invested.
Check out the other ‘splashy’ options for water ETFs here.