Reality Shares is a small ETF issuer trying to break into the competitive dividend-focused ETF landscape with some of the most innovative strategies we’ve seen recently. Eric Ervin, president and CEO of Reality Shares, tells us what sets the company’s ETFs apart, and what’s been the biggest challenge to growing assets. Reality Shares has four ETFs in the market today, with combined assets of about $55 million. They include:
- Reality Shares DIVS ETF (DIVY), $43 million in AUM
- Reality Shares DIVCON Leaders Dividend ETF (LEAD), $6.6 million AUM
- Reality Shares DIVCON Dividend Guard ETF (GARD), $2.6 million AUM
- Reality Shares DIVCON Dividend Defender ETF (DFND), $2.4 million AUM
Chart courtesy of StockCharts.com
ETF.com: DIVY is your largest fund, and it’s a complex strategy. How do you explain it in simple terms to advisors and investors?
Eric Ervin: There’s been an evolution in how we explain this strategy. I was an advisor for 20 years at Morgan Stanley, working with ultra high net worth clients. Back then, interest rates were 5-6%, so clients could get bonds paying 7-8%, which made them a great diversifier for stocks. When stocks went down, bonds went up, and in the meantime, you earned a good return.
But as interest rates came down, we had to look for alternatives. We looked at absolute-return-type strategies, and found this type of strategy [DIVY] was among them, which was so compelling, but it wasn't available to individual investors.
