Investors looking for generous yields and resiliency amid inflation and rising interest rates are turning to dividend stocks, which have seen skyrocketing interest in the current economic climate.
According to Todd Rosenbluth, head of research at ETF Trends and ETF Database, it is prudent that advisors are seeking out dividend-based ETF strategies to offset the inflationary pressures on the portfolios they build for clients. However, before choosing among the vast array of dividend strategies, Rosenbluth said it is essential to understand what is inside and why.
Guinness Atkinson Asset Management has two funds in its dividend ETF lineup to meet the needs of investors looking for both capital appreciation and income – two qualities particularly hard to find in the current environment.
The SmartETFs Asia Pacific Dividend Builder ETF (ADIV) and the SmartETFs Dividend Builder ETF (DIVS) offer actively managed exposure to high-quality dividend stocks in different regions.
DIVS primarily provides exposure to the United States, United Kingdom, and Western European countries, according to ETF Database.
Meanwhile, according to ETF Database, ADIV offers exposure to China, Taiwan, Hong Kong, Australia, and other Asia Pacific countries, a region of impressive growth.
SmartETFs hold a set number of positions in each of its portfolios, typically 30 or 35 holdings, and each fund follows an equal-weight approach. Equal weighting helps manage stock-specific risk.
As stocks move up and down relative to each other, the weightings change slightly, Guinness Atkinson will re-balance as circumstances dictate. However, the firm does not re-balance slavishly as they seek to reduce transaction costs and keep the turnover low – a benefit for investors.
SmartETFs has a substantial investment culture as a firm. Looking at the durability of the firm’s product roster, 100% of SmartETFs products have both survived and beaten their respective category median over the past ten years, as denoted by the firm’s 10-year success ratio, according to Morningstar.
“A high success ratio not only indicates good performance but also provides insight on a firm’s discipline around investment strategy and product development. It’s encouraging to see SmartETFs showcase strong risk-adjusted performance, across its entire product lineup, with an average 10-year Morningstar Rating of 4.0 stars,” Morningstar wrote.
For more news, information, and strategy, visit the Dividend Channel.