Russell Investments, indexer turned exchange traded fund provider, on Thursday launched a pair of ETFs that focus on dividend paying stocks.

Dividend-related ETFs have grown in popularity over the past year as investors sought income-generating investments as a way to cushion the effects of heightened volatility. [Top International ETFs for Dividends]

However, high-yield ETFs come with additional risks. The funds may experience capital appreciation or depreciation. At times, the capital depreciation may offset any potential gains from income. [Emerging Market Dividend ETFs]

The new new funds are:

  • Russell High Dividend Yield ETF (NYSEArca: HDIV) has a 0.33% expense ratio. HDIV will follow the performance of the Russell U.S. Large Cap High Dividend Yield Index.
  • Russell Small Cap High Dividend Yield ETF (NYSEArca: DVIS) has a 0.38% expense ratio. DVIS will try to reflect the performance of the Russell U.S. Small Cap High Dividend Yield Index.

“Each of these new ETFs is composed of dividend-paying companies with quality characteristics such as their ability to pay a higher dividend yield, exhibit sustained dividend growth and deliver earnings stability,” Russell said in a press release. “The quality characteristics of each company are then evaluated by measures of financial strength including positive cash flow, return on equity and analyst forecasts for earnings growth. Once the universe is screened for financially strong securities, the constituents are selected to help maximize dividend yield.”

“Russell research has shown that a total return approach that relies on a combination of dividends and capital appreciation can offer a more advantageous investment outcome than a simple dividend-yield strategy,” added David Koenig, investment strategist at Russell. “Focusing solely on dividend yield runs the risk of selecting securities that may have high dividend yields because they may be distressed and their price is falling or choosing companies that finance dividend payouts with debt.”

Russell has also filed to introduce a third dividend ETF:

  • Russell International High Dividend Yield ETF (NYSEArca: IDIV) 0.48% expense ratio. IDIV will try to track the performance of the Russell Developed ex-U.S. Large Cap high Dividend Index.

Russell currently manages 26 ETFs.

For more information on new launches, visit our new ETFs category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.