ArrowShares debuts with high income Arrow Dow Jones Global Yield ETF (GYLD)

May 8th, 2012 | By | Category: Alternatives / Multi-Asset

Arrow Investment Advisors has announced the launch of its debut ArrowShares ETF, the Arrow Dow Jones Global Yield ETF (GYLD). The ETF is the first fund to track the Dow Jones Global Composite Yield Index, a newly launched benchmark that provides diversified exposure to traditional and alternative sources of income across multiple asset classes.

ArrowShares debuts with high income Arrow Dow Jones Global Yield ETF (GYLD)

ArrowShares marks its debut ETF with the launch of the Arrow Dow Jones Global Yield ETF (GYLD).

The benchmark has delivered a competitive yield of approximately 7% to 9% over the past year.

“The prevailing low interest rate environment has made it extremely challenging for income-oriented investors to generate substantial yield via traditional means,” said Joseph Barrato, CEO, Arrow Investment Advisors. “The Arrow Dow Jones Global Yield ETF provides an exchange traded solution designed to boost the yield play in an investment portfolio.”

Compared to other yield strategies, which tend to be limited in scope, the new ArrowShares ETF takes a global approach to finding the most competitive sources of yield across various assets, including equities, fixed income and alternative investments.

“For investors seeking a higher-yielding core holding with similar historical risk to the S&P 500, we believe the Arrow Dow Jones Global Yield ETF may be an appropriate substitution for high yield or moderately aggressive equity allocations,” said Barrato. “GYLD is designed to tactically target yield, which may also make it suitable for investors seeking an adaptive element to their portfolio.”

To reduce concentration risk, the index is equally weighted among five global sub-indices covering equity, real estate, alternatives, corporate debt and sovereign debt. Additionally, each of the sub-indexes is equally weighted among 30 holdings, totalling 150 securities. To ensure optimum investability, the index methodology follows a strict screening process with quarterly rebalancing.

The five Dow Jones Global Composite Yield Index sub-indices are:

  • Dow Jones Global Equity Yield Index: measures high dividend-paying stocks selected from developed and emerging markets;
  • Dow Jones Global Real Estate Yield Index: measures high dividend-paying real estate stocks selected from developed and emerging markets;
  • Dow Jones Global Alternative Yield Index: measures high dividend-paying preferred shares, master limited partnerships (MLPs) and royalty trusts selected from developed and emerging markets;
  • Credit Suisse Yield Enhanced Global Corporate Index: measures higher-yielding corporate bonds selected from developed and emerging markets; and
  • Credit Suisse Yield Enhanced Sovereign Index: measures higher-yielding sovereign bonds selected from developed and emerging markets.

The Credit Suisse indices are provided by Credit Suisse’s Global Index and Alpha Strategies Group.

“We developed the Dow Jones Global Composite Yield Index in response to the strong demand for yield in the current market environment,” says Michael Petronella, president of Dow Jones Indexes. “This new index is an innovative and diversified measure of yield across multiple asset classes that offer exposure to traditional and alternative sources of income.”

The Arrow Dow Jones Global Yield ETF has an annual expense ratio of 0.75% and trades on the NYSE Arca. The fund makes monthly distributions.

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