New Infrastructure ETF Offers Global Equity Income Solution

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Most ETF investors associate the ProShares brand with leveraged and inverse indexes designed to give traders an edge with respect to market direction.

However, more recently this ETF provider has been focusing on unique equity and fixed-income solutions designed to tap niche markets.

Often times, being first to market in a previously uncovered area of the ETF landscape is a huge advantage in terms of initial assets, media attention and track record.


Its latest offering is the ProShares DJ Brookfield Global Infrastructure ETF (NYSE: TOLZ ), which invests in a global portfolio of companies focused on providing transportation, communications, energy, and water assets to our society.

TOLZ is the first pure-play infrastructure ETF that owns companies in the business of operating toll roads, airports, energy pipelines, electricity conduits and other essential services.

Top holdings include: National Grid (NYSE: NGG ), American Towers (NYSE: AMT ) and Enbridge (NYSE: ENB ).

Many of the 121 underlying holdings are high income earners structured as REITs or master limited partnerships that throw off a considerable income stream.  In fact, according to recent data, the dividend yield on TOLZ is calculated at 3.88 percent and income is paid on a quarterly basis.

Related: Minimum Volatility ETFs Hit All-Time Highs

In addition, only 50 percent of the underlying holdings are based in the United States, while the remaining 50 percent are disbursed in both developed and emerging markets overseas.  This gives TOLZ a truly global footprint that is designed to capture a representative sample of infrastructure industries around the world.

One of the advantages of investing in infrastructure companies is that demand is quite steady and aging assets must be continually updated or replaced.  In addition, there is often limited competition for companies that have exclusive access to specific transportation or support services.

On the flip side, there is always a danger of natural disasters or other unforeseen events crippling these key assets.  Fortunately, the inherent diversification qualities of the ETF structure help mitigate these risks when compared to investing directly in individual stocks.

TOLZ is undoubtedly another arrow in the global sector quiver that can target a specific mix of equities designed to provide both income and capital appreciation.

© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , ETFs , Investing Ideas

Referenced Stocks: AMT , ENB , NGG , TOLZ

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