Multi-factor real estate ETF for investors
who know that location, property type, and leverage matter
Vident Financial, LLC today announced the launch of PPTY -
U.S. Diversified Real Estate ETF (NYSE Arca:PPTY), a
multi-factor alternative to traditional market cap-weighted real
estate funds.
“If you ask for the three most important factors when investing
in real estate, you’ll probably hear ‘location, location,
location.’ To this we’d add property type and leverage,” said Fred
Stoops, head of real estate investments at Vident.
“The factors that matter when investing in real estate are no
secret,” Stoops continued. “Yet they’re ignored by the traditional
cap-weighted approach, which today has over 95% of REIT ETF assets.
With the launch of PPTY, we’re looking to give investors access to
a better solution: a rules-based fund that delivers diversified
exposure to U.S. real estate.”
PPTY seeks to track, before fees and expenses, the performance
of the U.S. Diversified Real Estate Index (PPTYX). The portfolio
construction process uses data on the individual properties held by
each company in the investment universe to build a portfolio
diversified by location and property type. Leverage and governance
factors are further included to reduce exposure to higher risk
companies.
- Location: PPTY’s stable
geographic targets deliver consistent diversification within each
property type.
- Property Type: PPTY uses fixed
allocations to each property type to ensure appropriate
diversification. The largest allocations are to core property types
such as residential, office, and industrial due to their strong
track record of delivering the stable income, inflation protection
and growth investors seek in real estate.
- Leverage: PPTY reduces
allocations to companies with high debt in favor of firms with
strong balance sheets.
- Governance: PPTY excludes
companies with two governance risk factors—external management and
a minority of their shares publicly listed.
PPTY’s rules-based approach uses these factors to provide the
consistent, diversified real estate exposure investors seek.
Vince Birley, chief executive officer at Vident, added, “With
all our ETFs, we seek to identify specific factors utilizing our
principle based framework that can add value for investors, and
we’ve done that again with PPTY. We’re delighted to introduce this
innovative new fund to the marketplace, the fifth in our growing
family of exchange traded funds.”
PPTY has a management fee of 0.53 percent, and joins a lineup of
Vident Financial ETFs that also includes the Vident International
Equity Fund (VIDI), Vident Core U.S. Equity Fund (VUSE), Vident
Core U.S. Bond Strategy (VBND), and FLAG-Forensic Accounting
Long-Short ETF (FLAG). As of March 20, 2018, Vident’s ETF family
had a total of approximately $1.94 billion in assets under
management
About Vident Financial
Vident Financial develops investment market solutions (indices
and funds) based on a distinct philosophy. Their investment
strategies are founded upon sound principles that help identify
environments where capital is going to thrive long-term, measuring
different factors (human productivity, quality leadership, etc.)
embedded within multiple process
layers. Visit www.videntfinancial.com for more
information.
Vident ETF's are dedicated to a principle based investing
approach, overweighting in countries and companies with strong
leadership and governance that foster greater prosperity.
Therefore, prudent fiscal management and ethical governance are
emphasized.
Vident Financial has been dedicated to answering to one
shareholder, the Vident ETF shareholder. Vident's company structure
assures that excess profits are used for the ETF shareholders
either in the form of further research or fee reductions;
Vident recently announced a 10% reduction in fees on the
Vident funds as of January 31, 2018. Vident's corporate
structure advocating for the fund shareholders has been compared to
Vanguard's corporate structure.
Carefully consider the Fund’s investment objectives, risk
factors, charges and expenses before investing. This and additional
information can be found in the Fund’s prospectus, which may be
obtained by visiting www.pptyetf.com. Read the
prospectus carefully before investing.
Investing involves risk, including the possible loss of
principal. Because the Fund is a fund of funds, its investment
performance largely depends on the investment performance of the
Underlying Funds in which it invests. An investment in the Fund is
subject to the risks associated with the Underlying Funds that
comprise the Index, including risks related to investments in
derivatives, REITs, foreign securities and municipal securities.
Fixed-income securities’ prices generally fall as interest rates
rise. High yield securities are subject to the increased risk of an
issuer’s inability to meet principal and interest payment
obligations. These securities may be subject to greater price
volatility due to such factors as specific corporate developments,
interest rate sensitivity, negative perceptions of the
non-investment grade securities markets, real or perceived adverse
economic conditions, and lower liquidity. Preferred stock is
subject to many of the risks associated with debt securities,
including interest rate risk. In addition, preferred stock may not
pay a dividend, an issuer may suspend payment of dividends on
preferred stock at any time, and in certain situations an issuer
may call or redeem its preferred stock or convert it to common
stock. International investments may also involve risk from
unfavorable fluctuations in currency values, differences in
generally accepted accounting principles, and from economic or
political instability. There is no guarantee that the fund will
meet its investment objective. The Fund may invest in derivatives,
including futures contracts, which are often more volatile than
other investments and may magnify the Fund’s gains or losses. The
fund is new with limited operating history.
Leverage may cause the effect of an increase or decrease in
the value of the portfolio securities to be magnified and the fund
to be more volatile than if leverage was not used. Although the
Fund intends to invest in a variety of securities and instruments,
the Fund will be considered to be non-diversified, as a result, the
Fund may be more exposed to the risks associated with and
developments affecting an individual issuer or a smaller number of
issuers than a fund that invests more widely. Shares of any ETF are
bought and sold at market price (not NAV), may trade at a discount
or premium to NAV and are not individually redeemed from the
Fund.
Diversification - Diversification does not assure a profit
nor protect against principal loss in a declining market.
Definition: U.S. Diversified Real Estate Index (PPTYX) - The
index is designed to track the performance of real estate
investment trusts (REIT) and other companies that invest directly
or indirectly in real estate through development, management, or
ownership, including property agencies.
Exchange Traded Concepts, LLC ("ETC") serves as the investment
advisor to the U.S. Diversified Real Estate ETF, (PPTY), and is
distributed by Quasar Distributors, LLC.
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version on businesswire.com: https://www.businesswire.com/news/home/20180327005776/en/
MacMillan CommunicationsChris Sullivan/Caroline
Emerson212-473-4442chris@macmillancom.com
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