Metaurus Advisors launches two innovative ETFs

Feb 7th, 2018 | By | Category: ETF and Index News

Metaurus Advisors, a financial technology and innovation company, has launched two ETFs on NYSE Arca: the Metaurus Advisors’ US Equity Cumulative Dividends Fund – Series 2027 (IDIV US) and Metaurus Advisors’ US Equity Ex-Dividend Fund – Series 2027 (XDIV US).

Richard Sandulli, co-CEO of Metaurus Advisors

Richard Sandulli, co-CEO of Metaurus Advisors

These funds have effectively stripped the dividend stream and the potential for capital growth of S&P 500 constituents into two separate components and packaged each component into its own ETF.

Richard Sandulli, co-CEO of Metaurus Advisors said, “These new ETFs are tools that can be used as standalone investments for dividend-focused investors who don’t want equity price exposure, or for longer-term growth investors who seek potentially higher market returns. They can also be held in various combinations to achieve a proportional balance between cash flow and market exposure.”

IDIV is targeted at income-oriented investors who wish to gain exposure to the growth of ordinary dividends of the companies in the S&P 500, without price exposure to the underlying stocks.

The fund tracks the Solactive US Cumulative Dividends Index – Series 2027. This index follows the current value of ordinary dividends expected to be paid on the S&P 500 until December 2027. IDIV therefore has a ten-year life, at which time it will be terminated. Until that point, the fund is expected to pay monthly distributions.

It has an expense ratio of 0.81%.

XDIV, on the other hand, allows investors direct exposure to the performance of S&P 500 constituents without exposure to their dividends, at a reduced purchase price to reflect the lack of an income stream.

An investment in XDIV allows investors to purchase equity index “beta” at an implied discount, which is likely to result in long-term returns that could differ materially from that of a direct investment in the SPDR S&P 500 ETF.

XDIV tracks the Solactive US Ex-Dividends Index – Series 2027, which follows the value of shares in the index, less the current value of ordinary dividends expected to be paid on S&P 500 stocks until December 2027. It too will be terminated after its ten-year lifespan.

The ETF does not use leverage. It provides equity price exposure by being compensated up front at the time of investment for the value of ten years of projected dividends.

Its expense ratio is 0.52%.

Sandulli added, “With IDIV and XDIV, investors and their advisors now have precise tools to balance current cash flow potential against their growth and risk tolerance, without sacrificing the diversification potential and low cost of index investing.

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