First Trust has launched a disruptive technology real estate ETF targeting the physical infrastructure underpinning the digital revolution, ETF Stream can reveal.
The First Trust Alerian Disruptive Technology Real Estate UCITS ETF (DTRE) listed on 1 April on the London Stock Exchange (LSE) with a total expense ratio (TER) of 0.60%.
DTRE will track the Alerian Global IT Real Estate and Infrastructure index providing exposure to companies that own and lease real estate supporting rapid data transfer including the latest generation cell towers and fibre optic networks and data centre and cloud computing networks.
It will also track firms involved in eCommerce warehousing such as distribution, storage warehouse and logistics facilities.
The index constituents will be weighted by their float-adjusted market capitalisation, with a maximum weight of 10% while each security will be classified as pure play or diversified by the index committee.
Pure play securities, which will primarily be made up of Real Estate Investment Trusts will make up 80% of the portfolio, compared to 20% diversified securities, companies that own real estate but is not the primary focus of the business. The index will rebalance on a quarterly basis.
Rupert Haddon (pictured), managing director, head of UK sales, at First Trust, said: “Property investors have had issues for some time in Europe. For many, the scars are still raw following liquidity issues in the open-ended property market following the Brexit referendum.
“For others, we can understand the reticence in allocating to broad, market-cap weighted REITs, which are typically positioned within declining areas such as the high street or offices. DTRE could provide the solution to both of these issues.”
Figures from DataBrigde show there is a $400bn annual investment gap needed to meet digital infrastructure demand.
Robert Hughes, chief commercial officer at Alerian, added: “Consumer trends and behaviours are creating significant demand for continued enhancements to the infrastructure required to support an accelerating move towards a more digital reality.”