Helping investors find quality stock opportunities in foreign markets, Janus Capital Group launched a smart-beta dividend exchange traded fund that targets global companies with a solid track record.
The Janus SG Global Quality Income ETF (NasdaqGM: SGQI) began trading Thursday. SGQI has a 0.45% net expense ratio.
The new ETF tries to reflect the performance of the SGI Global Quality Index, which includes quality companies with attractive and sustainable dividends from developed countries.
“The Underlying Index is constructed based on the premise that in the long run, quality companies that pay sustainable and higher dividends are a more reliable source of return than companies that take higher risks,” according to the prospectus.
The underlying index focuses on stocks from a universe of non-financial companies from developed countries with a free-float adjusted market cap of at least $3 billion. Société Générale, the index provider, also applies a rules-based screening process to assess companies on a range of factors to identify quality, creditworthiness and ability to provide attractive and sustainable dividends.
Quality is determined by factors like return on assets and cash flow from operations. Creditworthiness is determined by those that rank in the top 40% of all securities using a “distance to default” methodology that helps identify financial health. Lastly, stocks must have a dividend yield greater than the higher of 4% or 125% of the market cap-weighted dividend yield of the broader universe.
“We are committed to helping clients build portfolios which have the potential to outperform or reduce risk relative to market cap weighted alternatives, and when it comes to the search for yield, finding quality income should be a key component,” Nick Cherney, Senior Vice President and Head of Exchange Traded Products for Janus Capital Group, said in a press release. “The SGI Global Quality Income Index has been the underlying index for an ETF in Europe for more than three years, and we’re pleased to bring this strategy to the U.S. market.”
Sector weights include a hefty 28.7% utilities, along with 20.8% telecom services, 11.5% consumer discretionary, 10.4% consumer staples, 8.2% materials, 7.6% health care, 7.4% industrials, 2.8% information technology and 2.7% energy.
Top holdings include Agrium 3.1%, Tatts Group 3.0%, Six Flags Entertainment 3.0%, DUET Group 3.0% and AGL Energy 2.9%.
Country exposures include U.S. 27.2%, Australia 23.7%, Canada 13.6%, U.K. 6.9%, New Zealand 5.4%, Spain 5.0%, Switzerland 4.9%, France 2.8%, Japan 2.8%, Norway 2.7%, Hong Kong 2.6% and Finland 2.4%.
For more information on new fund products, visit our new ETFs category.