Guinness Atkinson Plans Dividend ETF

April 15, 2013

Guinness Atkinson put in a bid for a dividend ETF with global focus.

Guinness Atkinson, the California asset manager who filed for exemptive relief less than a month ago, has now filed regulatory paperwork proposing to bring a dividend ETF to market in an effort to chip off its share of investors’ hunger for the high-payout rewards of dividend funds.

The Guinness Atkinson Dividend Shares ETF will invest in U.S. as well as foreign dividend-paying companies that meet certain requirements on cash flow, dividend-payment history and capitalization, but it’s still unclear which index the strategy will track.

The idea is certainly timely, as investors continue to pour assets into dividend-focused ETFs, as they offer an income alternative to the paltry yields seen on risk-free government bonds these days.

Just last week, S&P noted that more and more companies are paying out dividends, saying that 81 percent of S&P 500 names served up payouts in the first quarter of the year, the highest rate since 1999. That pace puts U.S. stock dividend payments on track to reach a record high of $300 billion this year.

Dividend-focused ETFs abound, so it remains to be seen just how effective Guinness Atkinson will be at carving a niche in a well-populated segment anchored by the likes of the $5.4 billion Vanguard High Dividend Yield ETF (NYSEArca: VYM) and the $2.8 billion iShares High Dividend Equity Index Fund (NYSEArca: HDV), to name a few.

The prospectus offers little insight into the proposed fund, but does state that it will follow a replication strategy, seeking to produce, as closely as possible, the holdings of the index it follows.

Guinness Atkinson has yet to tag a ticker or price tag onto the fund.


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