Harbor Capital Advisors has announced the upcoming launch of the Harbor Dividend Growth Leaders ETF (DGIV US), a new fund targeting US equities with a history of stable or increasing dividends.
The ETF targets companies that have maintained or consistently increased their dividend payments.
The fully transparent, actively managed ETF is due to list on NYSE Arca in May and will come with an expense ratio of 0.50%.
The fund will be sub-advised by Westfield Capital Management, a Boston-based investment adviser that specializes in the US equity market and currently manages more than $17 billion in assets.
The ETF will pursue the same investment strategy as the $350 million Westfield Capital Dividend Growth Fund which, subject to shareholder approval, will merge into the new ETF.
Westfield’s Dividend Growth strategy, which is managed by CEO and CIO William A. Muggia, seeks long-term growth through income and capital appreciation by investing in a relatively concentrated portfolio of 30 to 50 primarily large-cap stocks with sustainable dividends.
Westfield employs a growth at a reasonable price (GARP) investment approach, favouring companies with underappreciated earnings growth trading at reasonable valuations.
The strategy is based on the belief that dividend policy is one of the clearest indicators of a management team’s confidence in the future growth prospects of their business and that the total return potential offered by companies that are both growing earnings and increasing their dividends is attractive.
As of the end of 2021, the strategy has outperformed the Nasdaq US Dividend Achievers Index over the past five years, delivering an annual return of 19.1% compared to 17.3% for the benchmark.
Kristof Gleich, President and CIO of Harbor Capital Advisors, said: “We are thrilled to extend our long-term strategic partnership with Westfield, providing advisors and investors with another vehicle to access our firm’s investment strategies. Fully transparent, actively managed ETFs have the potential to help clients meet their long-term investment goals, and we will continue to build out Harbor’s ETF franchise with talented, institutional-caliber asset managers like Westfield.”