ProShares launches European dividend growers ETF

Sep 11th, 2015 | By | Category: Equities

FACTOR INVESTING - THURSDAY 14TH JULY 2022 (08:15-11:30) - THE BERKELEY, LONDON Please join us for our annual factor investing breakfast briefing with participation from MSCI, FlexShares ETFs, Tabula and Professor Stefan Zohren, Deputy Director of the Oxford-Man Institute of Quantitative Finance. Please register now if you would like to attend.


ProShares, a US-based provider of exchange-traded funds, has launched the ProShares MSCI Europe Dividend Growers ETF (EUDV), a smart beta fund targeting European companies that have a history of consistently growing dividends. The fund has been listed on the NYSE Arca.

ProShares launches European dividend growers ETF

ProShares new smart beta fund selects European companies which have consistently grown their dividends.

“Dividend growth has historically been an indicator of a company’s financial strength and return potential,” said Michael L. Sapir, co-founder and CEO of ProShare Advisors. “We are pleased to add a Europe-focused fund to our suite of dividend growers ETFs.”

European dividend yield funds have experienced solid net inflows this year as investors have been attracted to the attractive income opportunities available in the region; as of 31 August the MSCI Europe Index yielded 3.4%, compared to 2.2% for the MSCI USA IndexThe ProShares fund offers a vehicle to harvest these returns with the added security of investing in those companies that have historically sustained their dividend.

The fund tracks the MSCI Europe Dividend Masters Index which selects constituents from its parent index (MSCI Europe) based on their dividend payments over the last 10 years. Companies that have successfully increased dividend payments year-on-year are included in the index. The index contains a minimum of 25 stocks which are equally weighted. To promote diversification, a 50% cap is imposed by country and a 30% cap by region. In the event that there are fewer than 25 stocks with at least 10 consecutive years of dividend growth, or if sector or country caps are breached, the index will include companies with shorter dividend growth histories.

As a long-term strategy there is academic support for dividend investing. According to independent research firm Ned Davis Research, both US and international companies that grew their dividends year-on-year outperformed companies that did not between 1996 and 2015.

 

The ETF carries a gross expense ratio of 0.98% and a net expense ratio of 0.55% (some expenses are waived until 30 September 2016) and is the latest in a suite of dividend-focused ETFs issued by the provider:

ProShares S&P 500 Dividend Aristocrats ETF (NOBL)

ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL)

ProShares Russell 2000 Dividend Growers ETF (SMDV)

ProShares MSCI EAFE Dividend Growers ETF (EFAD)

Tags: , , , , , , , , , , ,

Leave a Comment