Daily ETF Watch: Dividend ETFs To Launch

Three more dividend-focused funds are about to flood the ETF market.

On Jan. 7, First Trust Advisors will launch three new dividend ETFs to offer a new income-rich options in an ongoing environment of historically low interest rates.

With bond yields still at historical lows, and the Federal Reserve’s recent decision to begin tapering its bond buying only at a slow pace, using dividend-paying equities as a yield-replacement strategy continues to be a major investment theme for investors in 2014 as it was in 2013.

The new ETFs, which will trade on the Nasdaq exchange, are:

• First Trust High Income ETF (FTHI)
• First Trust Low Beta Income ETF (FTLB)
• First Trust Nasdaq Rising Dividend Achievers ETF (RDVY)

FTHI and FTLB will combine an equity portfolio that is focused on dividend-paying stocks with an index option strategy to provide an overall portfolio that is actively managed. They both have annual expense ratios of 0.85 percent, or $85 for every $10,000 invested.

RDVY uses a blend of historical and forward-looking screens intended to measure a company’s ability to grow its dividend, along with its share price. It tracks the Nasdaq US Rising Dividend Achievers Index. The fund will have an annual expense ratio of 0.50 percent, or $50 for every $10,000 invested.

Filings

Emerging Global Advisors has put into registration three new ETFs that will invest short-, intermediate- and long-term emerging market investment-grade bonds at a time when emerging market assets are under pressure from the Federal Reserve’s initial tapering of its economic stimulus.

The new proposed funds include the:

• EGShares TCW EM Short Term Investment Grade Bond ETF (SEMF)
• EGShares TCW EM Intermediate Term Investment Grade Bond ETF (IEMF)
• EGShares TCW EM Long Term Investment Grade Bond ETF (LEMF)

All three funds will charge 0.65 percent, or $65 for every $10,000 invested.