The emphasis on portfolio cash flow is not going away anytime soon. In a stubbornly low-yield environment with accommodative monetary policies expected to remain in place, the number one challenge for advisors in 2021 is to generate income for their clients.
In up coming webcast, Is Your Client Getting Enough Yield? Let’s Quadruple It, Sean O’Hara, President, Pacer ETFs Distributors; and Richard P. Silva Jr., CIO and Head of Trading, Metaurus Advisors, will outline an innovative ETF strategy that may help financial advisors enhance client yield generation by up to 4X the S&P 500 dividend yield with modestly lower exposure to the broader equities market.
Specifically, two new unique, dividend-focused ETFs are now available on the New York Stock Exchange. The first fund is the Pacer Metaurus US Large Cap Dividend Multiplier 400 ETF (QDPL), which seeks to provide cash distributions equal to 400% of the S&P 500 dividend yield in exchange for modestly lower exposure to the price return performance of the S&P 500. The second, the Pacer Metaurus US Large Cap Dividend Multiplier 300 ETF (TRPL), seeks to provide cash distributions equal to 300% of the S&P 500 dividend yield in exchange for modestly lower exposure to the price return performance of the S&P 500.
The Pacer Metaurus US Large Cap Dividend Multiplier 400 ETF separates the S&P 500 into its two return components: Dividend Cash Flow and Price Appreciation/Depreciation. The fund then reduces equity exposure to S&P 500 Index at approximately 88% and uses the remaining percentage to purchase dividend futures for 4x greater participation in dividends. Lastly, the strategy recombines the components into new ratios to produce an S&P 500 exposure with 4x dividend yield and approximately 88% S&P 500 Index exposure.
The Pacer Metaurus US Large Cap Dividend Multiplier 300 ETF also separates the S&P 500 into its two return components: Dividend Cash Flow and Price Appreciation/Depreciation. Additionally, it reduces equity exposure to S&P 500 Index at approximately 92% and use the remaining percentage to purchase dividend futures for 3x greater participation in dividends. The ETF then recombines the components into new ratios to produce an S&P 500 exposure with 3x dividend yield and approximately 92% S&P 500 Index exposure.
Financial advisors who are interested in learning more about this dividend strategy can register for the Wednesday, August 4 webcast here.