OLNEY, MD, May 08, 2012 (MARKETWIRE via COMTEX) -- Arrow Investment Advisors, LLC, the advisor to Arrow Funds, today announced the launch of its first exchange traded fund (ETF). The Arrow Dow Jones Global Yield ETF (nyse arca:GYLD) debuts as the only fund to track the Dow Jones Global Composite Yield Index, a newly launched benchmark that provides diversified exposure to traditional and alternative sources of income across multiple asset classes. The benchmark has shown a competitive yield range of approximately 7% to 9% over the past year, subject to market fluctuation.
"The prevailing low interest rate environment has made it extremely challenging for income-oriented investors to generate substantial yield via traditional means," says Joseph Barrato, CEO, Arrow Investment Advisors. "The Arrow Dow Jones Global Yield ETF provides an exchange traded solution designed to boost the yield play in an investment portfolio."
Compared to other yield strategies, which tend to be limited in scope, Arrow's new ETF takes a global approach to finding the most competitive sources of yield across various assets, including equities, fixed income and alternative investments.
"For investors seeking a higher-yielding core holding with similar historical risk to the S&P 500, we believe the Arrow Dow Jones Global Yield ETF may be an appropriate substitution for high yield or moderately aggressive equity allocations," says Barrato. "GYLD is designed to tactically target yield, which may also make it suitable for investors seeking an adaptive element to their portfolio."
At an expense ratio of 0.75%, the Arrow Dow Jones Global Yield ETF seeks investment results that correspond generally to the price and yield performance of the Dow Jones Global Composite Yield Index. To reduce concentration risk, the index is equally weighted among the following sub-indexes: global equity, global real estate, global alternatives (including MLPs), global corporate debt and global sovereign debt. Additionally, each of the sub-indexes is equally weighted among 30 holdings, totaling 150 securities. To ensure optimum investability, the index methodology follows a strict screening process with quarterly rebalancing.
"We developed the Dow Jones Global Composite Yield Index in response to the strong demand for yield in the current market environment," says Michael A. Petronella, president of Dow Jones Indexes. "This new index is an innovative and diversified measure of yield across multiple asset classes that offer exposure to traditional and alternative sources of income."
In addition to providing a new income alternative for investors, GYLD marks the debut of Arrow Investment Advisors' new exchange traded product line, which is branded ArrowShares. Since its inception in 2006, Arrow has earned a reputation for bringing innovative alternative investments and tactical portfolio solutions to the marketplace. ArrowShares serves as a complement to the firm's existing Arrow Funds lineup -- which has garnered more than $700 million in assets across five mutual funds providing exposure to commodities, managed futures, absolute return- and relative strength momentum-based strategies.