Wheaton, Illinois-based First Trust, a leading issuer of intelligent indexes, has plans to launch the first ETF focusing exclusively on the grid and electric energy infrastructure sector. The First Trust NASDAQ CleanEdge Smart Grid Infrastructure Index Fund will trade on the NASDAQ Exchange under the ticker GRID and will charge an expense ratio of 0.70%.
In order to be eligible for inclusion in the underlying index, a company must be classified by Clean Edge as a smart grid, electric infrastructure, and/or other grid-related activities company. There are also standard liquidity thresholds that must be met in order for a company to be included. While the benchmark includes niche companies such as National Grid PLC (NYSE:NGG) and SMA Solar Technology AG (OTCPK:SMTGF), it also features allocations to multinational mega-caps such as General Electric (NYSE:GE), Siemens AG (SI), and WESCO (NYSE:WCC).
GRID will be global in nature, investing in companies from the U.S., Germany, the UK and more. The fund will also maintain some degree of diversification across sectors: about 73% of holdings are allocated to industrials with the technology and utilities sectors receiving weightings of 19% and 9%, respectively.
Disclosure: No positions at time of writing.