Daily ETF Watch: ProShares Dividend Lineup

October 20, 2014

A recent filing from ProShares, known as a provider of “alternative investment” ETFs, indicates the firm is planning to further expand its lineup of dividend-focused equity funds.

Given investors’ unquenched thirst for yield in the current low-rate environment, dividend strategies are getting a lot of attention these days.

Roughly a year ago, the firm rolled out the ProShares S&P 500 Dividend Aristocrats ETF (NOBL | A-63); currently, it has more than $255 million in assets under management and comes with an expense ratio of 0.35 percent, or $35 for each $10,000 invested.

Its benchmark screens the S&P 500 for companies that have at least a 25-year unbroken record of dividend increases and equal-weights the components. The equal-weighting paired with the emphasis on dividends captures two of the favorite themes for smart-beta fans.

In August, ProShares followed up with the launch of the ProShares MSCI EAFE Dividend Growers ETF (EFAD), which, like NOBL, selects its components from its parent index based on their dividend history and equal-weights them. However, its holdings only need 10 years of unbroken dividend increases rather than 25 years. The MSCI EAFE Dividend Masters Index is derived from the widely used MSCI EAFE Index.

EFAD carries an expense ratio of 0.50 percent and currently has less than $4 million.

ProShares also has the ProShares MSCI Emerging Markets Dividend Growers ETF (EMDV) in registration. The fund will track an equal-weighted benchmark based on the MSCI Emerging Markets Index; components will have a history of at least seven years of steadily increasing dividend payments.

The latest filing indicates that the firm is not stopping there, but is looking to create a full lineup of dividend-focused ETFs that will include the ProShares Midcap Dividend Growers ETF and the ProShares Russell 2000 Dividend Growers ETF.

While the small-cap fund will select its components from the Russell 2000, targeting companies with at least seven years of consistent annual dividend increases, the midcap fund’s index provider and parent index were not named. However, the fund will require that its midcap components have at least 10 years of consistent dividend increases.

ProShares discussed its “Dividend Growers” family of ETFs in an ETF.com webinar held on Sept. 18.

 

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