A New Smart-Beta REITs ETF to Capture a Growing Sector

Hartford Funds has expanded its line of Lattice exchange traded funds with a real estate investment trust strategy that implements a risk-first investment design based on a multi-factor, smart-beta approach.

On Tuesday, Hartford Funds launched the Lattice Real Estate Strategy ETF (NYSEArca: RORE). RORE has a 0.45% total expense ratio.

According to a prospectus sheet, RORE will try to reflect the performance of the Lattice Risk-Optimized Real Estate Strategy Index, which tracks U.S. REITs based on a favorable combination of factor characteristics, such as valuation, momentum and quality.

“The Index is built with a rules-based, proprietary methodology which employs a multi-layered risk-controlled approach that seeks to address the Strategy’s active risks versus the cap-weighted universe,” according to RORE’s prospectus. “Specifically, the Index seeks to select companies exhibiting attractive risk premia profiles while managing overall volatility levels and active risks.”

The underlying portfolio is risk- and factor-adjusted twice per year in March and September.

“The launch of RORE is a natural extension of Hartford Funds’ strategic beta ETF platform,” Darek Wojnar, Head of Exchange-Traded Funds at Hartford Funds, said in a press release. “The strategy focuses exclusively on REITs and may be a compelling solution for investors interested in taking advantage of the growing opportunities in the real estate sector.”