Efficient access to global listed infrastructure
ETFS Global Core Infrastructure ETF (ASX code: CORE) provides exposure to the 75 least volatile listed infrastructure companies selected from global developed market stock exchanges.
CORE aims to provide investors with a return that (before fees and expenses) tracks the performance of the Solactive Global Core Infrastructure Low Volatility Index. It uses a full-replication strategy to track the index, meaning that it holds all of the shares that make up the index closely in proportion to their index weights.
The universe of shares is filtered by liquidity and tradability and contains a maximum of 40 stocks in any one sector. It is weighted inversely in proportion to the volatility of each stock, meaning that the stocks with the lowest volatilities receive the highest weights.
Why consider CORE?
Exposure to infrastructure which typically offers high and stable yields and low volatility.
It can offer defensive positioning and portfolio diversification due to infrastructure’s low correlation with other asset classes.
Liquidity and transparency.
Why use infrastructure?
Infrastructure companies include airports, toll roads, railways and telecommunications infrastructure. These types of companies often operate in monopolies or oligopolies and have high barriers to entry with strong pricing power. Infrastructure assets tend to have predictable cash flows and earnings, generally making them a stable source of income. This means that they tend to move upwards in line with economic growth in the good times but are less likely to be materially impacted in the bad times.
It is also worth noting that a number of essential services come under infrastructure, meaning regardless of the economic situation, they continue to be needed. For this reason, many industries within infrastructure can be considered defensive investments.
Does CORE offer distributions?
CORE offers distributions on a quarterly basis.
Am I exposed to any foreign currency in CORE?
Yes. CORE is unhedged, meaning you are exposed to the currency movements between the Australian dollar and the currency that each index constituent’s listing is denominated in.
How can I use CORE in a portfolio?
CORE can offer diversification and act as a defensive allocation due to infrastructure’s low correlation with other asset classes.
It can also be used as part of an income strategy due to the typical yields offered by the infrastructure sector.
Investors can also use CORE as a hedge against inflation, due to the strong pricing power of infrastructure companies.
Why Low Volatility?
Investing in low volatility stocks has been shown to help improve the risk adjusted return of a portfolio.
By filtering out the most volatile stocks, CORE is tilted towards the most stable infrastructure companies which are the most likely to maintain consistent revenue.
CORE measures volatility in US dollar terms, meaning that countries that are experiencing high currency volatility will tend to be filtered out of the index, increasing the overall stability of returns.
What are the ‘non-core’ infrastructure assets excluded from CORE’s Index?
CORE’s index invests only in core infrastructure assets. Non-core infrastructure assets include real estate developments and real estate investment trusts, as well as integrated oil companies and oil and gas producers.
|Total Return (%) the Fund||Total Return (%) benchmark||Tracking difference||Tracking error|
|3 Year p.a.||---||---||---||---|
|5 Year p.a.||---||---||---||---|
|10 Year p.a.||---||---||---||---|
|Since inception p.a.||3.82%||4.61%||-0.78%||0.72%|