NEW YORK--(BUSINESS WIRE)--The Reaves Utilities ETF (NYSE MKT: UTES), the first and only actively managed utilities exchange-traded fund, has successfully demonstrated a three-year track record, outperforming its passive benchmark index, the S&P 500 Utilities Index,** since inception.
As one of the first fully transparent actively managed ETFs launched in the industry, the Reaves Utilities ETF leverages Reaves Asset Management’s deep industry expertise, accrued over the firm’s four-decade-long track record of investing in the utilities sector, to invest in well-managed utilities, including mid- and small-cap companies not found in many of the market-cap weighted passive index funds. In addition, UTES is designed with the goal of reducing certain risks that passive utilities investors may take on unknowingly, such as unintended exposure to commodities and foreign exchange.
Upon obtaining its three-year track record, UTES received a 4-star Morningstar Rating™ in October 2018. The overall rating is out of five stars and is based on the weighted average of the Fund’s performance ratings over the three years since its inception. The 4-star rating is an objective reflection of the Fund’s risk-adjusted return, compared against the 9 other funds in Morningstar’s utilities fund category.
“The decision-making freedom we have as active managers is what sets our Fund’s strategy apart from our competitors and delivers valuable alpha to our clients in a sector historically known for yield”, said UTES’ co-portfolio manager Jay Rhame. “With the ability to omit certain indexed stocks and include other, non-indexed growth stocks, we seek to build a portfolio based strictly on where we see opportunities to capture upside and avoid downside in the utilities sector.”
The objective of UTES is to outperform other utility funds by focusing on distinctive opportunities presented by differing regulatory, demographic, economic and climate trends. Reaves’ portfolio managers invest in securities across the utilities sector, including but not limited to firms that participate in electrical distribution and transmission, gas distribution, water distribution, independent power producers and YieldCos, as well as vertically integrated and traditional utilities.
“Marking our three-year anniversary is an incredibly important milestone for our Fund,” said John Bartlett, co-portfolio manager of UTES. “Looking to the future, we see opportunities for our clients to benefit from growth in the utilities sector, which boasts strong fundamentals and a supportive regulatory environment.”
Investors in UTES are provided with full transparency and daily updates on its holdings. The Reaves Utilities ETF does not seek to replicate the performance of a specified passive index of securities. More information on UTES can be found at virtusetfs.com.
| Performance (%) as of September 30, 2018 | ||||||||
| YTD | 1 Year | 3 Years | Since Inception* | |||||
| NAV | 5.32 | 4.86 | 12.42 | 13.56 | ||||
| Market Price | 5.26 | 4.79 | 12.39 | 13.53 | ||||
| Index** | 2.72 | 2.93 | 10.61 | 11.70 | ||||
*Inception date: September 23, 2015
Performance data quoted represents past results. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Please visit www.virtusetfs.com performance data current to the most recent month-end.
The Fund’s Total Annual Operating Expense is 0.95%.
**Index: S&P 500 Utilities Index
The S&P 500® Utilities Index is a free-float market capitalization-weighted index comprised of companies included in the S&P 500 utilities sector. The index is calculated on a total return basis with dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.
Expenses are based on estimated amounts for the current fiscal year. The management fee is structured as a “unified fee”, out of which the Fund’s sub-adviser pays all routine expenses for the Fund, except payments under any 12b-1 plan; taxes and other governmental fees; brokerage fees, commissions and other transaction expenses; interest and other costs of borrowing money; litigation or arbitration expenses; acquired fund fees and expenses; and extraordinary expenses of the Fund, each of which is paid by the Fund.
NAV returns are calculated using the Fund’s daily 4:00 p.m. NAV, and include the reinvestment of all dividends and other distributions (reinvested at the Fund's NAV on distribution ex-date). Market price returns are calculated using the 4:00 pm midpoint between the bid and offer, and include the reinvestment of all dividends and other distributions (reinvested at the 4:00pm bid/offer midpoint on distribution ex-date). Market price returns do not represent the return you would receive if you traded at other times.
You should consider the Fund’s investment objectives, risks, and charges and expenses carefully before investing. Contact Virtus ETF Solutions at 1-888-383-0553 or visit www.virtusetfs.com to obtain a prospectus which contains this and other information about the fund. The prospectus should be read carefully before investing.
Fund Risks - Equity Securities: The market price of equity securities may be adversely affected by financial market, industry, or issuer-specific events. Focus on a particular style or on small or medium-sized companies may enhance that risk. Utility Sector Concentration: The Fund's investments are concentrated in the utility sector and may present more risks than if the Fund were broadly diversified over numerous sectors of the economy. Industry/Sector Concentration: A fund that focuses its investments in a particular industry or sector will be more sensitive to conditions that affect that industry or sector than a non-concentrated fund. Prospectus: For additional information on risks, please see the Fund's prospectus.
There is no guarantee that the Fund’s strategy will be achieved. Strong ratings are not indicative of positive fund performance.
For more information about Reaves Asset Management and its investible products, or to arrange an interview with its portfolio managers, please contact:
Eleis Brennan, ebrennan@intermarket.com, 212-754-5610
About Morningstar Data
© 2018 Morningstar, Inc. All rights reserved. The information contained herein:
(1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
About Morningstar Rating
The Morningstar Rating™ for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Ratings do not take into account the effects of sales charges and loads.
Virtus ETF Advisers LLC serves as the investment adviser and W.H. Reaves & Co., Inc. (d/b/a Reaves Asset Management) serves as the investment sub-adviser to the Fund. The Fund is distributed by ETF Distributors LLC, an affiliate of Virtus ETF Advisers LLC
