Experts are Focused on this Undiscovered Dividend ETF
Discover what makes this quality dividend ETF different and what the pros like about it.
You likely have never heard of the SmartETFs Dividend Builder Fund (NYSE: DIVS), but it is understandably getting attention from some industry experts. The Mutual Fund Observer believes the “SmartETFs Dividend Builder represents a very smart strategy.”
TheStreet.com recently wrote “DIVS: The focus on elite, high quality dividend growth stocks make this ETF great for all investment portfolios.”
And yes, Morningstar rates DIVS as a Five Star Fund. As of May 31, 2023, DIVS was rated 5 stars out of 341 funds in the Global Large-Stock Blend category.
What makes DIVS so special? It’s the focus on quality. But what does quality mean and don’t most dividend funds focus on quality?
The managers of DIVS have a very strict definition of quality which they apply rigorously. The process starts with an examination of the last 10 years of cash flow. To be eligible for inclusion in DIVS, a company must produce a high return on capital for every year of the previous ten years. Less than 5% of companies achieve this consistently high return on capital. Next, companies must have low levels of debt and ideally be trading at a discount to their intrinsic or historical value based on key valuation metrics.
While other dividend ETFs and funds may prioritize quality, their definition of quality may not involve such a strict process or may define quality as historical dividend growth, which may or may not be a good indicator of current business prospects.
This investment process has worked well for DIVS; the Dividend Builder ETF has an exceptional long-term track record stretching back over a decade. How good is the track record? Good enough to get the attention of some well-known industry experts and to achieve a Five Star rating. But investors are encouraged to compare their favorite dividend fund to DIVS and learn for themselves just how great DIVS is.
We invite you to learn more about DIVS and compare it to your favorite dividend fund.
Click the links below to learn more:
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 at SmartETFs.com/DIVS
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.
Cash Flow is the net amount of cash and cash equivalents being transferred in and out of a company.
Return on Capital is a measure of the profitability and value-creating potential of companies relative to the amount of capital invested by shareholders and other debtholders.
Sharpe Ratio is a measure of an investment’s risk-adjusted performance, calculated by comparing its return to that of a risk-free asset.
Standard Deviation is a statistic that measures the dispersion of a dataset relative to its mean and is calculated as the square root of the variance.
Ulcer Index is a technical indicator that measures downside risk in terms of both the depth and duration of price declines. The index increases in value as the price moves farther away from a recent high and falls as the price rises to new highs.
Capture Ratio measures the performance of an investment during upward and downward market trends with respect to its benchmark index.
S&P 500 is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States.
MSCI All Country World Index (ACWI) ex USA Index captures large and mid cap representation across 22 of 23 Developed Markets countries (excluding the US) and 24 Emerging Markets countries. With 2,258 constituents, the index covers approximately 85% of the global equity opportunity set outside the US.
Investing involves risk, including possible loss of principal. 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.
Distributed by Foreside Fund Services LLC.