Guggenheim Launches New Income-Focused Infrastructure ETF

Investors searching for income are increasingly looking for ways to diversify their investments outside the traditional methods of bonds and dividend paying stocks. 

With that goal in mind, Guggenheim Investments recently launched the Guggenheim S&P High Income Infrastructure ETF (GHII).  This ETF is the first of its kind to focus on global infrastructure-related industries such as public services, toll roads, airports, water, and other essential services with a yield-weighted index methodology.

What this means is - the 50 underlying high dividend infrastructure companies in GHII are ranked according to their yields rather than market cap or other fundamental criteria.  This places a more prominent focus on high income MLPs and other dividend-generating asset classes rather than larger traditional utility companies. 

At launch, GHII included just a 20 percent allocation to the United States, while the rest of the fund was spread out over both developed and emerging market foreign nations.   Australia and China make up the second and third highest allocations within the index. 

This strategic income ETF will carry an expense ratio of 0.45 percent and dividends will be paid quarterly to shareholders.

According to the press release, “Global infrastructure securities represent a unique opportunity to invest in an important and growing asset class,” said William Belden, Managing Director of Product Development for Guggenheim Investments. “One of the attractive investment features of infrastructure companies is their comparatively stable yield regardless of market or business cycles.”

While current yield statistics on GHII were not immediately available, other funds in this space such as the iShares Global Infrastructure ETF (IGF) have their 30-day SEC yield listed at 2.90 percent.  However, with the yield-weighted asset allocation criteria, it would not be surprising to see GHII with a far higher income level.

Other competitors in this space include the ProShares DJ Brookfield Global Infrastructure ETF (TOLZ) and SPDR S&P Global Infrastructure ETF (GII).  Each ETF has a slightly variant take on its underlying holdings, expense ratios, and yield.