For instance, UTES managers may overweight companies in areas with relatively better population growth, weather, and industrial activity to take advantage of regional variations.
The fund may also utilize financial leverage to enhance returns – UTES intends to use leverage initially of up to 38% of total assets.
The Reaves Utility Income Fund also keeps in mind tax-advantaged dividend income, seeking to maximize qualified dividend income for shareholders.
To get a sense of how the new active utility ETF may do, investors may take a look at the Reaves Utility Income Fund (UTG), which has $822.8 million in assets under management. The fund is down 10.1% year-to-date, but it has gained 4.2% over the past year and returned an average annualized 10.9% over the past decade. UTG has an adjusted total expense ratio of 1.16% for 2014 and a distribution rate of 6.40%.
For more information on new fund products, visit our new ETFs category.
Max Chen contributed to this article.