Daily ETF Watch: 2 New Dividend Funds

March 17, 2015

Today Global X is adding two more funds to its "SuperDividend" family of equal-weighted, dividend-focused ETFs. The funds come along at a time when investors are still scrambling in their search for income, meaning dividend ETFs are in the spotlight.

 

The firm launched the $1 billion Global X SuperDividend ETF (SDIV | C-46) in 2011, which targets 100 global equities that are among the highest dividend payers, spanning all size segments. It followed up with the launch of the $287 million Global X SuperDividend U.S. ETF (DIV | B-40) in 2013; DIV tracks 50 of the U.S.'s highest-dividend-paying stocks with low-volatility levels.

 

The Global X SuperDividend REIT ETF (SRET) will track the 30 top-yielding REITs, while the Global X SuperDividend Emerging Markets ETF (SDEM) will track the 50 top-yielding emerging market stocks. SRET and SDEM come with expense ratios of 0.58 percent and 0.65 percent, respectively, or $58 and $65 for each $10,000 invested.

 

PowerShares Drops Some RAFI Indexes

Separately, Invesco PowerShares plans to change the indexes on 10 of its funds, including nine funds tracking Research Affiliates' Fundamental indexes, effective May 26, according to a pair of recent filings. All the affected funds will get indexes provided by Russell.

 

Unaffected will be the PowerShares FTSE RAFI US 1000 Portfolio (PRF | A-90), the $4.4 billion flagship fund in the PowerShares FTSE RAFI series of ETFs and the other five FTSE RAFI funds. The nine funds involved are "Fundamental Pure" indexes provided only by Research Affiliates rather than via a partnership between Research Affiliates and FTSE.

 

The change stems from a Research Affiliates decision to discontinue the indexes, according to John Feyerer, a vice president of ETF product management at PowerShares. He added that his firm's relationship with Research Affiliates remains otherwise unchanged. PowerShares manages nearly $9 billion in ETFs assets that are tied to Research Affiliates-related indexes. PRF is on the verge of celebrating 10 years of trading.

 

All together, the funds have accumulated more than $500 million in assets under management since their launch nearly a decade ago.

 

Old Fund Name New Fund Name
PowerShares Fundamental Pure Large Core (PXLC | B-86)* PowerShares Russell Top 200 Equal Weight 
PowerShares Fundamental Pure Large Growth (PXLG | B-79) PowerShares Russell Top 200 Pure Growth 
PowerShares Fundamental Pure Large Value (PXLV | B-90) PowerShares Russell Top 200 Pure Value 
PowerShares Fundamental Pure Mid Core (PXMC | B-88)* PowerShares Russell Midcap Equal Weight 
PowerShares Fundamental Pure Mid Growth (PXMG | B-76) PowerShares Russell Midcap Pure Growth 
PowerShares Fundamental Pure Mid Value (PXMV | B-80) PowerShares Russell Midcap Pure Value 
PowerShares Fundamental Pure Small Core (PXSC | B-88)* PowerShares Russell 2000 Equal Weight 
PowerShares Fundamental Pure Small Growth (PXSG | B-80) PowerShares Russell 2000 Pure Growth 
PowerShares Fundamental Pure Small Value (PXSV | B-78) PowerShares Russell 2000 Pure Value 

 

Note that the starred funds will receive new tickers when they begin trading on May 26; PXLC, PXMC and PXSC will adopt the tickers EQWL, EQWM and EQWS. Those three funds, all of which will track equal-weighted indexes, will also see their expense ratios drop from 0.39 percent to 0.25 percent.

 

The Russell Relationship

The index shift will essentially transition the three "core" ETFs in the family to equal-weighted versions of the Russell Top 200 Index, Russell MidCap Index and the popular Russell 2000 Index. The growth and value indexes underlying the rest of the funds are not weighted by market capitalization but by the growth and value scores of their components, respectively. In other words, the indexes are inclusive and do not exclude any components of the parent index; rather, they reweight them.

 

"We are obviously very excited about the partnership with Russell," Feyerer noted. "When you look at the institutional space in particular, Russell has been very successful there, and their style indexes are almost the de facto benchmark."

 

PowerShares, in December, launched the PowerShares Russell 1000 Equal Weight Portfolio (EQAL); that fund currently has more than $155 million in assets.

'Century' ETF Changing Direction

Additionally, the PowerShares NYSE Century Portfolio (NYCC | C-76), which tracks U.S.-listed companies that have been incorporated for at least 100 years, will undergo an index, ticker and expense ratio change in addition to changing its name. The PowerShares Contrarian Opportunities Portfolio will track the Dow Jones U.S. Contrarian Opportunities Index and trade under the ticker "CNTR." The fund will also see its expense ratio fall from 0.50 percent to 0.35 percent.

 

The index is designed to cover companies that have stronger-than-average fundamentals, but that have lagged the performance of the overall market.

 

 

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