However, the portfolio is still exposed to some specific risks. For instance, as interest rates rise, REITs’ interest payments also go up, so REITs have less cash available for dividends for equity investors. An extended low oil environment may also pressure MLPs as oil producers cut back on production, which may reduce the services required of energy infrastructure.
Potential investors should also be aware that ALTY is still small with $1.3 million in assets under management and has an average trading volume of about 1,750 shares, according to Morningstar data. Consequently, investors should utilize limit orders to better execute trades.
Moreover, As ALTY holds multiple asset classes across multiple funds, the new ETF’s expense ratio is 3.03%, which is high by the standards of most actively managed mutual funds, let alone passively managed ETFs. Most of the additional costs come from the 2.28% acquired fund fees and expenses, which may be partially a result of the BDC structure. [Making Sense of Acquired Fund Fees in BDC ETFs]
Global X SuperDividend Alternatives ETF
Max Chen contributed to this article.