Digital Assets Report

Newsletter

Like this article?

Sign up to our free newsletter

Solactive launches two global infrastructure income indices

Related Topics

Solactive has expanded its smart beta offering with the launch two indices in the infrastructure space, the Solactive Global Infrastructure High Income Index and the Solactive Global Infrastructure Income Index.

These indices offer exposure to an investible basket of infrastructure companies from developed markets screened for high dividend yield and low volatility.
 
The Solactive Global Infrastructure High Income Index offers more focus on dividend income, by only selecting stocks that are expected to pay a dividend in the next quarter. The indices are licensed to JP Morgan who will develop structured products for their distributor clients.
 
Infrastructure has drawn wide attention in recent months following announcements by multiple developed countries’ governments of increases in infrastructure spending. In the US, the government pledged to invest USD1 trillion to rebuild the country’s infrastructure and fix roads, bridges and airports. Japan committed to increase the infrastructure budget to USD61 billion. Similarly, the Canadian government announced the launch of a 10-year infrastructure investment programme, which will include incremental funding for new infrastructure projects estimated at more than USD 60 billion.
 
Considering the potential momentum that infrastructure companies could develop, the Solactive Global Infrastructure High Income Index and the Solactive Global Infrastructure Income Index provide exposure to companies likely to benefit from plans of increased infrastructure spending in developed economies.
 
Henning Kahre (pictured), head of research at Solactive, says: “The new Solactive Index provides exposure to rising infrastructure spending globally. Additional index features ensure that the index is suitable for structured products. We are currently seeing a lot of demand for the infrastructure theme across client groups and for different types of investment products.”
 
Arnaud Jobert, co-head of investible indices at JP Morgan, says: “Increased infrastructure spending is a global theme that presents investors with the opportunity to take a long-dated view with defensive positioning, and the Solactive Infrastructure Index Series adds to this by providing low volatility and high dividend selection. While we remain in a low Euro interest rates environment, products based on the Solactive Indices will also provide investors with relatively high levels of capital protection.”
 
The Solactive Global Infrastructure High Income Index and the Solactive Global Infrastructure Income Index are calculated as price return and gross total return indices and are denominated in both EUR and USD. The indices are composed of 30 infrastructure-related stocks subject to country and industry diversification filters weighted according to inverse volatility. The composition is readjusted quarterly.

Like this article? Sign up to our free newsletter

Most Popular

Further Reading

Featured