ETF Trends
ETF Trends

Investors looking to grow dividend income over time can look to Victory Capital’s newly launched VictoryShares Dividend Accelerator ETF (VSDA), which began trading on Nasdaq today.

VSDA seeks to provide investment results that track the performance of the Nasdaq Victory Dividend Accelerator Index (NQVDIV), which Victory Capital developed in partnership with Nasdaq.

The Index uses fundamental criteria, including proven earnings stability, to select companies with the highest likelihood of consistently growing dividends year over year. It seeks to identify those companies early in their lifecycles and assemble them in a rules-based portfolio that emphasizes growing dividends per share.

The VictoryShares ETF platform is designed to provide investors with rules-based solutions that bridge the gap between the active and traditional passive elements of their portfolios. The expanded product line builds upon the success of the VictoryShares volatility-weighted ETFs, which have grown to more than $1.2 billion in AUM as of March 31, 2017.

ETF Trends spoke with Mannik Dhillon, President, VictoryShares and Solutions, to discuss the launch of VSDA.

Tell me about the VictoryShares Dividend Accelerator ETF (VSDA) and what it is designed to do?

With the overall VictoryShares platform, our goal is to help fill in our gap between what has been traditional passive for years and true active management. We come from a pedigree of active management at Victory and we feel there is a way to bring active edge into these rules based solutions. Where the dividend accelerator fits in is simply looking at what the demand has been in the marketplace, which is income. Clients are definitely in need of better income solutions. Dividend Accelerator isn’t focused on dividend yield per say like a high-dividend high-yield equity income product, which we call a “dividend payer”. This is a “dividend grower” product.

There are a number of products that have been investing in dividend growers, companies that have consistently year over year increased their dividends for some period of time. These ETFs vary from growing their dividends for 10 years or more, 20 years or more, 25 years or more etc. The Dividend Accelerator seeks to identify those companies earlier in their dividend growth lifecycle, so you can potentially benefit from more of that dividend growth performance.

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