U.S. markets open in 7 hours 2 minutes
  • S&P Futures

    +6.75 (+0.15%)
  • Dow Futures

    +27.00 (+0.08%)
  • Nasdaq Futures

    +24.50 (+0.16%)
  • Russell 2000 Futures

    +1.40 (+0.06%)
  • Crude Oil

    +0.48 (+0.58%)
  • Gold

    +11.70 (+0.66%)
  • Silver

    +0.33 (+1.42%)

    +0.0041 (+0.35%)
  • 10-Yr Bond

    0.0000 (0.00%)
  • Vix

    +0.01 (+0.06%)

    +0.0046 (+0.34%)

    -0.2380 (-0.21%)

    +40.97 (+0.07%)
  • CMC Crypto 200

    +3.86 (+0.27%)
  • FTSE 100

    -30.20 (-0.42%)
  • Nikkei 225

    +190.06 (+0.65%)

A New Muti-Asset ETF Of ETFs

The ETF of ETFs structure is increasingly popular and with interest rates still low, multi-asset exchange-traded funds could regain some luster with income investors. So the PowerShares DWA Tactical Multi-Asset Income Portfolio (NASDAQ: DWIN) could prove to be one of this year's more well timed ETF launches.

The PowerShares DWA Tactical Multi-Asset Income Portfolio, which debuted Wednesday, uses a similar approach to that of the PowerShares DWA Tactical Sector Rotation Portfolio (NASDAQ: DWTR), one of the most successful new ETFs to come market last year.

A Closer Look AT DWIN

DWIN follows the Dorsey Wright Multi-Asset Income Index. That index “invests its assets in the shares of other, underlying exchange-traded funds eligible for inclusion in the Index, rather than in securities of individual companies. The Index is designed to select investments from a universe of income strategies with the criteria for inclusion based on a combination of relative strength and current yield,” according to PowerShares.

Related Link: REIT ETFs Ready For Sector Status

Like DWTR, DWIN is comprised of five other PowerShares ETFs. Holdings in the new multi-asset ETF are as follows: The PowerShares Preferred Portfolio(ETF) (NYSE: PGX), PowerShares Build America Bond Portfolio (NYSE: BAB), PowerShares High Yld. Dividend Achv(ETF) (NYSE: PEY), PowerShares Global Short Term High Yield Bond Portfolio (NYSE: PGHY) and the PowerShares Emerging Markets Sovereign Debt Portfolio (NYSE: PCY).

“The last 30 years have seen a strong bull market in fixed income, suppressing rates down to historically low levels. This phenomenon has caused investors to search for yield in a variety of untraditional asset classes including high yield, MLPs, and bank loans. While higher yields have been realized, investors also have realized an increase in volatility. A strategy that monitors these segments systematically may help mitigate some of this volatility while potentially maintaining higher income levels,” said PowerShares in a statement.

Beyond common stocks, multi-asset ETFs can hold assets ranging from junk bonds to REITs to MLPs to preferred stocks. A lineup featuring assets like that not only helps investors generate income, but also reduces exposure to the intense correlations seen throughout equity markets.

In addition, non-investment grade bonds are viewed as less sensitive to interest rate increases, and dividends on preferred stocks are almost a sure bet, because a company that does not pay a previously agreed to dividend on a preferred issue risks harm to its credit rating. Investors enjoy the high yields and the close to guaranteed income offered by preferreds. However, preferred issues are vulnerable in a rising interest rate environment, and the reality is U.S. interest rates only have one way to go and it is not lower.

DWIN charges 0.69 percent per year, or $69 for every $10,000 invested.

Image Credit: Public Domain

See more from Benzinga

© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.