San Diego-based Reality Shares Advisors, a newcomer to the ETF space, has filed regulatory paperwork to launch three ETFs to offer another avenue to income-rich alternatives in an environment of persistent low-interest rates.
With bond yields still at historical lows, and the Federal Reserve’s recent no-tapering announcement, using dividend-paying equities as a yield-replacement strategy continues to be a major investment theme for investors in 2013 as it was in 2012.
RealityShares’ latest proposed offering, including:
- Reality Shares Isolated U.S. Dividend Growth Index ETF, a passive strategy
- Reality Shares Isolated Global Dividend Growth Index ETF, a passive strategy
- Reality Shares Isolated Dividend Growth ETF, an active strategy
The firm argued in the paperwork that a company’s earnings provide a more accurate measure of the company’s potential long-term value than the price of its stock. Thus, RealityShares believes that isolating the dividend from the stock price can provide positive long-term returns that are not directly correlated to broad equity market or fixed-income returns.
Reality Shares’ latest ETFs will join a roster of more than 30 other U.S. dividend-focused funds, all of which seek to slice and dice the segment of dividend-paying stocks to find sources of income for investors currently grappling with paltry yields in much of the traditional fixed-income space.
Assets in U.S. high-dividend-yielding funds currently total about $60.35 billion, according to data compiled by IndexUniverse.
Tickers and fees for the funds weren’t disclosed in the filing.
Reality Shares, previously known as ERNY Financial Advisors, in April submitted two exemptive relief filings seeking to enter the U.S. ETF market with actively managed ETFs as well as index-based funds, including self-indexed strategies.
Our annual fixed-income conference is coming up in a little more than a week and I can’t wait.
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