2 ETF Fund for investment in the private sector
The private investment sector can be defined as a risky sector that operates outside of open markets. Private equity funds invest in existing private enterprises and receive a share in the capital. The percentage of the share can reach up to 50%.
Unlike venture investing which is focused on startups, private equity firms invest in well-known stable businesses.
In 2018, the capital of private equity funds amounted to about $350 billion.
Choosing companies that will provide the greatest return on investment in the long term can be difficult. ETF will help investors do this. However, keep in mind that these funds usually charge an annual commission.
In this article, we will look at 2 ETFs that specialize in private equity.
- ProShares Global Listed Private Equity ETF
- Cost: $32.21;
- The dividend yield of 8.66%;
- Commission: 3.41%.
ProShares Global Listed Private Equity ETF (PEX) allows investors to invest in a range of private equity firms that work directly with private businesses.
PEX is based on the LPX® Direct Listed Private Equity index. The fund was launched in 2013 and currently manages a portfolio of 30 assets valued at approximately $17 million.
Approximately 60% of the capital is invested in the top ten assets. The list is headed by the British company 3i (III), the business development company Ares Capital (ARCC) and the Canadian company Onex (ONEXF), (ONEX), which specializes in investing in private companies and infrastructure; investing in electronics manufacturers and information technology suppliers for the health sector, as well as two French businesses: the private investment company Eurazeo (EURA) and the investment group Wendel (MWDP).
2. Invesco Global Listed Private Equity ETF
- Cost: $13.02;
- Dividend yield: 6.25%;
- Commission: 1.59%.
Invesco Global Listed Private Equity ETF (PSP) provides access to private equity firms, including public companies, business development companies, limited liability partnerships, and other businesses that invest in or lend capital to private companies.
In the United States, limited liability partnerships are mostly public partnerships and offer generous dividends. By law, they receive more than 90% of their income from related operating activities, usually related to goods, natural resources, or real estate.
The PSP portfolio, which includes 67 assets, is based on the Red Rocks Global Listed Private Equity index. The Fund was launched in 2006 and currently manages approximately $180 million in assets.
About 31% of the funds are invested in the top ten shares. The list is headed by private equity firm Partners Group (PGPHF), private equity firm Blackstone Group (BX), TransDigm Group (TDG), consumer Internet platform Prosus (PROSF), and Australian conglomerate Wesfarmers (WFAFY), whose operations extend to leisure, landscaping, outdoor recreation, and energy companies.
Since the beginning of the year, the fund has grown by 1.49% and reached an annual high on December 2.