We have spent time in the past covering the RevenueShares family of ETFs, known for the $272 million RWJ (RevenueShares Small Cap, Expense Ratio 0.54%) and $258 million RWL (RevenueShares Large Cap, Expense Ratio 0.49%) and today we bring attention to a newer, overlooked strategy that the firm launched in late 2013 known as RDIV (RevenueShares Ultra Dividend Fund, Expense Ratio 0.49%).
The fund is not totally unrecognized to investors, as it has seen a healthy uptick in volume in the October alone, with more than one >100k share trading day (ADV is about 11,500 shares).
The fund combs the S&P 900 universe, which is as you might have guessed the S&P 500 plus the S&P 400 (Mid Cap) universe for sixty individual stocks that it ultimately selects and owns. While categorized in most places as “Large Cap”, the fund does have notable Mid Cap exposure as well, and the ranking/weighting system is similar in nature with the methodology employed across the other RevenueShares products.
The “highest average quarterly dividend yield over the past twelve months” is sought after, again ultimately selecting 60 securities. Then, in RevenueShares fashion, that “sub index” is re-weighted by company revenues to determine the final index weightings of the components.
It is important to note that the screening universe for ultimate inclusion in the final fund holdings is a known universe, that of the widely accepted S&P 500 and the S&P 400 Indexes combined.Top weighted names at the moment are VZ (>5.1%), DUK (>5.0%), T (>5.0%), AAPL (>5.0%), and PM (>4.9%). Many of these companies have been in headlines this week due to their quarterly earnings reports, and subsequently, the trading volume in these individual names has surged, and at times RDIV’s volume has reflected this as well at least in the parameters of what the “norm” is for this newer fund.
From a sector standpoint, we see the largest concentrations in Utilities (>35%), Communication Services (>17%), and Consumer Staples (>11.4%). Another interesting observation on RDIV is that it ranks quite well in the total return category in Large Cap Value on a 1 year return basis (given that this is a newer fund) according to Morningstar data.