Latest Tuttle ETF Launch Aims to Combine Dividends, Growth

The Laffer Tengler Equity Income ETF (TGLR) homes in on dividends and sales to find potential growth stocks.

Matthew Tuttle, the man behind the inverse Jim Cramer and Cathie Wood ETFs, is teaming up with the asset manager Laffer Tengler to launch a new fund that homes in on dividends and sales to find growth.  

The new LAFFER | TENGLER Equity Income ETF (TGLR), which launched today, is an actively managed stock fund managed by portfolio manager Nancy Tengler. The fund, with an expense ratio of 0.95%, is a highly concentrated exchange-traded fund with 25-35 stocks.  

The fund’s concentration is a part of the appeal, differentiating it from most other active funds, according to Tuttle, CEO of Tuttle Capital Management. Most active funds aren’t great “because they just hug the indexes, but charge active prices,” Tuttle said. “This isn’t a closet index fund or a disguised sector fund, like the funds from, say, Cathie Wood.” 

The fund differs from most dividend-oriented funds in that it eschews the highest-yielding companies, like electric utilities. Instead it uses a company’s dividend yield relative to the S&P 500 to try to suss out the true strength of a company.  

“The dividend is a portion of what management thinks the long-term sustainable earnings power of the company is,” said Nancy Tengler, CEO and CIO of Laffer Tengler Investments. She said combining relative dividend yield with looking at a company’s relative price-to-sales ratio, also to the S&P 500, helps her pick stocks with strong growth. 

Active, Dividend ETFs Finding Growth 

Tengler focuses on these two metrics because, “you can drive a truck between pro-forma earnings and GAAP earnings, but if you manipulate sales, you generally go to jail.”  

When she finds a company that fits in her relative yield metric, she then applies a proprietary series of 12 factors, both qualitative and quantitative, to decide if she will be an investor. Tengler said this “leads you to names that growth is already out of, but value hasn’t stumbled on yet.” 

The Laffer Tengler Equity Income ETF (TGLR) is based on a separately managed account strategy that has been continuously managed by Tengler since 2015. Since the beginning of 2015, the strategy outperformed the S&P 500 before fees, but after fees are included, its annualized total return is lower than the S&P 500’s by about a fifth of a percentage point.  

Looking to the future, Tengler said she’s looking to launch more ETFs based on strategies she runs for SMAs: “We have a clean energy [strategy] that turns three soon, and a ‘12 Best Ideas’ portfolio that might be of interest too.”  

Contact Gabe Alpert at [email protected]