Invesco has launched two ETFs: one focused on strong and forecasted high dividend growth, and another targeting strong cash flow. The two funds add to the firm’s lineup of smart beta ETFs.
The Invesco S&P High Dividend Growers ETF (NYSE Arca: DIVG) focuses on the potential for dividend growth. It targets companies in the S&P 500 that have both historically offered consistent (or growing) dividends and the highest forecasted dividend yield growth.
DIVG trades on the New York Stock Exchange.
DIVG tracks the S&P 500 High Dividend Growth Index, leveraging S&P Dow Jones Indices’ dividend forecasting methodology. The 100 companies in DIVG’s underlying index will be weighted by 12-month forecasted dividend yield, not backward-looking dividend data. S&P Global Market Intelligence publishes the forecast data used to calculate the index.
S&P Dow Jones Indices’ Head of Factors and Dividend Indices Rupert Watts explained in a release how DIVG’s index works. Per Watts, the index uses “an independent ‘Dividend Forecast Dataset’ … to incorporate a forward-looking assessment into its index methodology.” S&P Global Market Intelligence sourced the dataset.
Tracking Free Cash Flow Achievers With QOWZ
Meanwhile, the Invesco Nasdaq Free Cash Flow Achieves ETF (QOWZ) will include companies with high levels of free cash flow. This fund trades on the Nasdaq.
QOWZ tracks the Nasdaq US Free Cash Flow Achievers Index. It targets U.S.-listed companies that have had positive free cash flow in each of the past 11 years, without prioritizing free cash flow yield.
The fund’s Index selects the 50 companies with the highest count of positive year-over-year changes in free cash flow. The trailing three-year compounded annual growth rate in free cash flow is used as a tiebreaker.
Invesco’s Head of Factor and Core Equity ETFs Nick Kalivas called these funds “a strong addition” to the firm’s smart beta ETFs.
“Many advisors turn to Invesco’s suite of ETFs for alternatives to market-cap weighted products,” said VettaFi’s head of research Todd Rosenbluth. “It’s great to see the firm further expand its lineup of smart beta products.”
Both ETFs carry an expense ratio of 0.39%.
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