Dividend-focused investing is popular these days, as investors look for sources other than traditional bond ETFs for income. One of today’s launches sets out to simplify—as well as diversify—the search for the best dividend ETF with one single ticker.
The Amplify YieldShares Prime 5 Dividend ETF (PFV) is essentially a fund of funds. This ETF owns the top five U.S. dividend ETFs selected based on three criteria: low expense ratio, low share price volatility and high dividend income, according to Amplify, a firm led by industry veteran Christian Magoon.
The idea here is that sorting through the growing family of dividend ETFs, totaling more than 140 funds to date, is no small task, and finding the best one to meet various portfolio needs can be daunting to most investors. PFV aims to offer in one single fund a diversified mix of the best in class. The fund is listed on Bats.
Costing 0.49% in expense ratio, or $49 per $10,000 invested, PFV currently owns each of the following at about 20% of the portfolio:
- iShares Core High Dividend ETF (HDV)
- WisdomTree High Dividend Fund (DHS)
- Schwab U.S. Large-Cap Value ETF (SCHV)
- Vanguard High Dividend Yield Index Fund (VYM)
- Schwab US Dividend Equity ETF (SCHD)
Elkhorn & Commodities
Elkhorn, the ETF issuer led by another industry veteran, Ben Fulton, is rolling out today two commodity ETFs, one linked to Dorsey Wright’s expertise and the other to Rob Arnott and his RAFI team.
Both funds are actively managed—a segment of commodity ETFs that remains largely untapped. There are only four other active commodity ETFs in the market today, the biggest of which is the PowerShares DB Optimum Yield Diversified Commodity Strategy Portfolio (PDBC), with $350 million in assets.
The Elkhorn Commodity Rotation Strategy ETF (DWAC) is momentum-based, picking the top five commodities within the S&P GSCI Index based on relative strength metrics, according to Elkhorn. The methodology relies on Dorsey Wright’s proprietary relative strength model.
“The portfolio is designed to be a tactical, momentum-based commodity strategy with a modified dynamic roll methodology,” the company said in a release.
The Elkhorn Fundamental Commodity Strategy ETF (RCOM) sets out to outperform the Dow Jones RAFI Commodity Index.
“The Dow Jones RAFI Commodity Index uses price momentum and roll yield to generate alpha,” the company said. “RCOM is a fundamental factor-weighted, broad-market commodity ETF strategy with a modified dynamic roll methodology.”
RCOM is listed on Bats, which owns ETF.com. DWAC is listed on the Nasdaq.
AdvisorShares’ New Fee Feature
AdvisorShares is launching today a fund that isn’t as innovative in its construction as it is in its fee structure.
The AdvisorShares Focused Equity ETF (CWS) is an active fund that relies on the expertise of its portfolio manager to pick the top stocks with the best “fundamental attributes,” according to the firm. The fund is designed to have a focus on value—buying at low prices and holding it for the long term.
What’s innovative about this ETF is its fee structure. The expense ratio changes with the performance of the fund, meaning the portfolio manager will get paid based on his results.
“My ultimate goal has always been to show investors that a simple strategy of buying and holding great stocks not only can be very profitable over the long term, but can beat the broader market averages with potential ease,” said Eddy Elfenbein, founder of Crossing Wall Street and portfolio manager of CWS.
As Elfenbein put it, the fee structure shows investors “that I have skin in the game too.”
CWS will be listed on the NYSE Arca, and it will have an initial expense ratio of 0.75%, which can go as high as 0.85% or as low as 0.65% based on performance, the company said.
Contact Cinthia Murphy at [email protected]