IndexIQ Launches Small Cap Oil ETF

IndexIQ has introduced the IQ Global Oil Small Cap ETF (NYSE Arca: IOIL).

The firm says IOIL is the first global small-cap exchange-traded fund (ETF) designed to provide pure play exposure to companies that are primarily engaged in the oil industry. This includes firms involved in exploration and production (E&P); refining and marketing; and equipment, services and drilling.   

The fund seeks to track, before fees and expenses, the performance of the IQ Global Oil Small Cap Index (Bloomberg Index Ticker IQSMOIL).  

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To be included in the index, companies must have a minimum average market capitalization of $150 million for the prior 90-day period. Stocks are required to have a minimum average daily trading volume of at least $1 million for the prior 90 days, and a minimum monthly volume of 250,000 shares for the prior six months. The Index’s components and their respective weights are rebalanced quarterly.  

As of April 11, 2011, the index had sector allocations in refining & marketing (40.46%), exploration & production (36.90%) and equipment & services (22.64%); while the top three countries were the United States (45.08%), Canada (11.67%) and Thailand (7.46%).

All REIT Sectors Deliver Strong Returns in April

On a total return basis, the FTSE NAREIT All Equity REITs Index gained 5.11% and the FTSE NAREIT All REITs Index was up 4.89% in April, compared to 2.96% for the S&P 500.

According to the National Association of Real Estate Investment Trusts (NAREIT), for the first four months of the year, the FTSE NAREIT All Equity REITs Index was up 13.00% and the FTSE NAREIT All REITs Index was up 12.02% compared to the S&P 500’s 9.06% gain. On a 12-month basis ended April 30, REITs strongly outperformed the S&P 500, with the FTSE NAREIT All Equity REITs Index up 22.88% and the FTSE NAREIT All REITs Index up 22.37% compared to the S&P 500’s 17.22%.  

The Office sector topped other major REIT market sectors in April with a 6.87% return. Apartments and Retail followed closely with 6.59% and 6.55% returns, respectively. The Retail sector was led by Regional Malls with a 7.15% return. The Industrial sector delivered a 2.33% return for the month.  

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Offices also topped other major sectors for the first four months of 2011 with a 15.01% return, followed by Apartments with a 13.91% gain; Industrial with 13.77% and Retail with 11.36%. Regional malls again topped the Retail sector with a gain of 13.90%. For the 12 months ended April 30, Apartments were up 31.52%; Industrial was up 28.5%; Retail was up 25.22% (led by Regional Malls, up 29.43%); and Office was up 19.37%.  

REITs also continued to deliver strong yields for income investors. The top performing sector was Home Financing Mortgage REITs with a yield of 14.18% at April 30. The FTSE NAREIT All REITs Index delivered a 4.09% yield at April 30, compared with a 2.89% yield for the Barclays U.S. Agg. Corporate Bond Index and a 1.90% yield for the S&P 500.  

Industry data as of April 30, 2011 includes: 

  • Total equity market capitalization = $455 billion 
  • Equity REIT market capitalization = $412 billion 
  • REITs own approximately $500 billion of commercial real estate assets, or 10% to 15% of total institutionally owned commercial real estate 
  • 158 REITs are in the FTSE NAREIT All REIT Index 
  • 140 REITs are traded on the New York Stock Exchange 
  • NYSE listed REITs equity market capitalization = $445 billion 
More information is at http://www.nareit.com.

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