An actively managed Asia-Pacific region dividend exchange traded fund could help income-minded investors diversify with international market exposure.
The SmartETFs Asia Pacific Dividend Builder (NYSE Arca: ADIV) is an actively managed dividend strategy focused on investing in high-quality, dividend-growth stocks of mature companies in the Asia-Pacific region. ADIV generally holds 35 approximately equally-weighted positions. The strategy is managed by Edmund Harriss.
“The Asia Pacific region, home to a third of the world’s population, is one of the fastest growing regions on Earth. ADIV seeks to harness that growth and turn it into an opportunity for income creation,” according to SmartETFs.
“Over the last two decades, Asian economies have both diversified and matured, leading to a plethora of high-quality income opportunities.”
The SmartETFs Asia Pacific Dividend Builder targets consistent high return on capital as opposed to focusing solely on the highest yielding dividend payers.
“We believe consistent high return on capital is a good indication of a company’s durability, and its ability to pay healthy dividends. The Fund invests in companies that are unusually consistent in generating returns on capital above their cost of capital,” according to SmartETFs.
“Our approach to dividend investing is to focus on companies that can sustainably grow their dividend into the future, rather than simply looking for companies with a high dividend yield.”
Additionally, the management team tries to come up with a smaller portfolio of 35 high-conviction company stocks that are equally weighted to provide a balance between diversification and conviction.
“We focus on ‘bottom-up’ stock selection rather than trying to make decisions based on an expected outlook for the region’s economy. We like to invest in good companies that have, in the short term, fallen out of favor, but that have previously shown an ability to weather most economic environments over time,” according to SmartETFs.
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