According to an update, despite being down 1.41%, the Guinness Atkinson SmartETFs Dividend Builder ETF (DIVS) outperformed its benchmark due to solid stock selection within the industrials, healthcare, and financials sectors.
As a quality-focused dividend ETF, DIVS leans on companies that show consistent results and are positioned to survive even the harshest of economic downturns. The fund’s 1.41% loss is primarily due to November’s robust gains being erased as COVID variant fears resurfaced and the market got hit with hawkish statements from Fed Chairman Jerome Powell. Most sectors posted losses for the month, save for IT. DIVS benefitted from defensive and cyclical holdings.
The Holdings That Shined
ABB Ltd. was the marquee performer in the fund in November. ABB is a European industrial electrical equipment firm that creates products that are utilized in electrical grids, automation, and production line robotics. Its wide base of customers across multiple sectors allowed it to thrive even as economic conditions turned south. The company did this despite supply chain constraints and gained ground on the Biden administration’s infrastructure plans. ABB was up 4.9% on the month.
Other strong performers included Broadcom Inc., a global infrastructure technology firm that focuses on technology that connects the world, and the surging Taiwan Semiconductor Manufacturing Co. Ltd. With supply chain shortages, semiconductors are in huge demand.
The fund’s biggest underperformer was Henkel, which was adversely affected by supply issues and raw material price increases that hit the company’s bottom line hard this past month. Supply constraints are likely short-term, and the company has the ability to pass on increased costs. Fund managers remain confident in the long-term potential of Henkel.
DIVS Bottom Line
Overall, DIVS is up 15.23% YTD, despite the rocky month, and up 20% over a one-year period. The fund’s focus on healthy companies that consistently provide dividend growth through high-quality fundamentals has allowed it to continuously put up good numbers every month.
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