DIVS

Dividend Builder ETF

 

What’s better than dividend income? Growing dividend income. Dividends can grow over time and historically have grown at a rate that exceeds the rate of inflation.

 DIVS takes a thoughtful approach. Many dividend growth ETFs focus on the dividend history. We prefer to look at the economic fundamentals of each company.

DIVS invests with a quality bias. We seek companies that have growing dividends, persistently high rates of return on capital, and low levels of debt.

DIVS offers access to high-quality dividend growers in a single transaction. DIVS generally holds approximately 35 equally weighted positions.

FUND DESCRIPTION

The SmartETFs Dividend Builder ETF invests globally in high quality dividend growers; companies with a long history of persistently high return on capital.

Other dividend strategies often focus on one of the following:

1. High dividend yield

2. History of the dividend

We believe that both of these strategies are flawed, as they often fail to identify what factors are generating the dividend. When building the DIVS portfolio, portfolio managers perform a detailed review to seek the following:

– Persistent cashflow: We seek companies that have achieved a real cash flow on investment of at least 10% on capital for each of the last 10 years.

– Sound balance sheets: We seek companies that have low levels of debt.

– Value: We seek to purchase shares at a time when target companies are trading at the low end of their peers, low end of their history, and low end of their industry.

All of this is meant to produce a portfolio of dividend paying companies that has the potential to be able to grow their dividends consistently over time.

OBJECTIVE

The SmartETFs Dividend Builder ETF seeks a moderate level of current income and consistent dividend growth at a rate that exceeds inflation.

PERFORMANCE
Performance data over 1 year is annualized
As of Month End 02/28/2023FUND NAVMARKET PRICEINDEX
Year to Date0.78%0.95%4.50%
1 Year-3.55%-2.75%-7.33%
3 Year11.68%11.85%9.89%
5 Year8.69%8.79%6.88%
10 Year9.61%9.66%8.77%
Since Inception9.71%9.76%8.89%

 

As of Quarter End 12/31/2022FUND NAVMARKET PRICEINDEX
Year to Date-9.39%-9.01%-18.14%
1 Year-9.39%-9.01%-18.14%
3 Year7.93%8.04%4.94%
5 Year8.84%8.91%6.14%
10 Year10.03%10.07%8.85%
Since Inception9.78%9.81%8.58%

Performance data quoted represents past performance and is no guarantee of future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than quoted. Performance data for the most recent month-end is available above.

The SmartETFs Dividend Builder ETF acquired the assets and liabilities of the predecessor mutual fund, the Guinness Atkinson Dividend Builder Fund, on March 26, 2021. As a result of the transaction, the Fund adopted the accounting and performance history of its predecessor mutual fund. Performance results shown prior to March 26, 2021, reflect the performance of the predecessor mutual fund. The Market Price returns shown prior to March 26, 2021 reflects the predecessor mutual fund’s NAV.

The fund Benchmark Index is the MSCI World Index.

The MSCI World Index is a broad global equity index that represents large and mid-cap equity performance across 23 developed markets countries. It covers approximately 85% of the free float-adjusted market capitalization in each country and MSCI world index does not offer exposure to emerging markets.

An investor cannot invest directly in an index.

Market Price: The current price at which shares are bought and sold. Market returns are based upon the last trade price.

NAV: The dollar value of a single share, based on the value of the underlying assets of the fund minus its liabilities, divided by the number of shares outstanding. Calculated at the end of each business day.

Effective as of the close of business on March 26, 2021, the fund acquired the assets and assumed the performance, financial and other historical information of the Guinness Atkinson Dividend Builder Fund, an open-end mutual fund (incepted March 30, 2012).  The fund’s investment objectives, strategies and policies are substantially similar to those of the predecessor mutual fund and it was managed by the same portfolio managers. Performance information for periods prior to March 26, 2021 is the historical performance of the predecessor mutual fund and reflects the higher operating expenses of the predecessor mutual fund. The fund has lower expenses than the predecessor mutual fund.  For periods prior to March 29, 2021, the fund’s performance would have been higher than shown had it operated with the fund’s current expense levels.

 

30-DAY MEDIAN BID/ASK SPREAD as of 03/20/20230.2574%

 

PREMIUM/DISCOUNT

PREMIUM/DISCOUNTCalendar Year 2022Q1 2022Q2 2022Q3 2022Q4 2022
Days traded at premium15820524838
Days traded at discount8042101216

 

DIVS Premium Discount NAV to Closing Price: Calendar Year 2022

 

DIVS Premium Discount NAV to Closing Price: Q4 2022

 

 

HOLDINGS as of 03/21/2023
NET ASSETS %TICKERNAMEDESCRIPTIONMARKET PRICE ($)SHARES HELDMARKET VALUE ($)CUSIP
3.34AVGOBROADCOM INCCOMMON STOCK636.751,152733,536.0011135F101
3.23NOVOBNOVO NORDISK A/S-BCOMMON STOCK145.624,860707,706.56K72807132
3.20TSMTAIWAN SEMICONDUCTOR-SP ADRCOMMON STOCK92.507,589701,982.50874039100
3.13BNDANONECOMMON STOCK59.6111,510686,069.81F12033134
3.08SUSCHNEIDER ELEC SACOMMON STOCK160.444,210675,437.88F86921107
3.05MSFTMICROSOFT CORPCOMMON STOCK273.782,443668,844.56594918104
2.99SHLSONIC HEALTHCARE LTDCOMMON STOCK22.6728,890654,974.69Q8563C107
2.97ABBNABB LTD-REGCOMMON STOCK33.2219,611651,468.25H0010V101
2.93OTISOTIS WORLDWIDE CORPCOMMON STOCK82.317,816643,334.9468902V107
2.93ITWILLINOIS TOOL WORKSCOMMON STOCK235.162,732642,457.12452308109
↓ FULL HOLDINGS ↓
HOLDINGS as of 03/20/2023
NET ASSETS %TICKERNAMEDESCRIPTIONMARKET PRICE ($)SHARES HELDMARKET VALUE ($)CUSIP
3.41AVGOBROADCOM INCCOMMON STOCK643.711,152741,553.9411135F101
3.18NOVOBNOVO NORDISK A/S-BCOMMON STOCK142.444,860692,250.62K72807132
3.14TSMTAIWAN SEMICONDUCTOR-SP ADRCOMMON STOCK90.047,589683,313.56874039100
3.11BNDANONECOMMON STOCK58.8311,510677,091.56F12033134
3.06MSFTMICROSOFT CORPCOMMON STOCK272.232,443665,057.88594918104
3.06SUSCHNEIDER ELEC SACOMMON STOCK157.934,210664,878.31F86921107
3.02SHLSONIC HEALTHCARE LTDCOMMON STOCK22.7228,890656,486.50Q8563C107
2.94OTISOTIS WORLDWIDE CORPCOMMON STOCK81.787,816639,192.5068902V107
2.94ITWILLINOIS TOOL WORKSCOMMON STOCK233.892,732638,987.50452308109
2.92ABBNABB LTD-REGCOMMON STOCK32.4119,611635,541.69H0010V101
↓ FULL HOLDINGS ↓

*The Adviser has contractually agreed to reduce its fees and/or pay ETF expenses (excluding acquired fund fees and expenses, interest, taxes, dividends on short positions and extraordinary expenses) in order to limit the Fund’s total annual operating expenses to 0.65% through June 30, 2025. This contractual arrangement may be terminated by the Board of the Fund at any time without penalty upon 60 days’ notice.

The Fund invests in securities that pay dividends, and there is no guarantee that the securities held by the Fund will declare or pay dividends in the future, or that dividends will remain at current levels or increase. Investments in foreign securities involve greater volatility, political, economic and currency risks and differences in accounting methods. These risks are greater for emerging markets countries. For more information on the risks of investing in this Fund, please see the prospectus.

Morningstar Ratings™ Disclosure

The Morningstar Rating™ for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.