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Why You Should Invest in Dividend Growth ETFs Now

Neena Mishra
  • (0:45) - Oversold Stocks: Stock Screen Criteria 
  • (6:40) - Tracey’s Top Stock Picks: ECHO, GIII, TCED, UNM, ARCB
  • (12:50) - Episode Roundup: Podcast@Zacks.com

In this episode of ETF Spotlight, I talk with Eric Ervin, CEO of Reality Shares. Reality Shares is known for its innovative ETFs, including a couple of blockchain ETFs, a new multi-factor ETF and a suite of forward-looking dividend growth ETFs.

First off, we discuss what’s happening in the market. With concerns about trade, slowing global growth and peak earnings weighing on investor sentiment, volatility may continue into 2019.

Dividend growth ETFs invest in companies with solid balance sheets and strong cash flows. These companies tend to perform well during periods of high uncertainty.

Eric explains Reality Shares’ proprietary DIVCON methodology, a forward-looking rating system designed to identify companies within the S&P 500 with the highest probability to increase their dividends based on seven qualitative factors.

Reality Shares DIVCON Leaders Dividend ETF LEAD holds dividend-paying US large-cap stocks that are likely to increase their dividends in the future. Mastercard MA, Visa V and Nike NKE are among its top holdings. We discuss how stocks are selected and weighted in the index.

Reality Shares DIVCON Dividend Guard ETF GARD is a long-short ETF. It holds companies that are likely to increase their dividends but when its indicators forecast a market downturn, the ETF cuts its long exposure to 50% and adds a 50% short position in stocks that are expected to cut dividends. The fund is about 50% long and 50% short, i.e. market neutral now.

Reality Shares DIVCON Dividend Defender ETF DFND is also a long-short ETF. It aims to maintain a 75% long position in companies most likely to increase dividends and a 25% short in the firms most likely to cut their dividends, as indicated by DIVCON.

Reality Shares DIVS ETF DIVY separates dividend growth from stock prices and provides investors pure play exposure to dividend growth of large-cap U.S. companies, without exposure to stock price volatility. We discuss potential benefits of this approach.

There are many cheaper dividend growth ETFs available to investors. Why should investors look at these ETFs?

Please visit realityshares.com if you want to learn more about these products. Make sure to be on the lookout for the next edition of ETF Spotlight! If you have any comments or questions, please email podcast@zacks.com.

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REALT-DVCN LDR (LEAD): ETF Research Reports
REALT-DVCN DDF (DFND): ETF Research Reports
REALITY SHRS ET (DIVY): ETF Research Reports
REALT-DVCN DVG (GARD): ETF Research Reports
NIKE, Inc. (NKE) : Free Stock Analysis Report
Visa Inc. (V) : Free Stock Analysis Report
Mastercard Incorporated (MA) : Free Stock Analysis Report
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