Russell Investments introduced the Russell High Dividend Yield ETF (HDIV) and Russell Small Cap High Dividend Yield ETF (DIVS).
Each of these new ETFs is composed of dividend-paying companies with quality characteristics such as their ability to pay a higher dividend yield, exhibit sustained dividend growth and deliver earnings stability. The quality characteristics of each company are then evaluated by measures of financial strength including positive cash flow, return on equity and analyst forecasts for earnings growth. Once the universe is screened for financially strong securities, the constituents are selected to help maximize dividend yield.
“These measures of financial strength were created to help investors avoid chasing dividend yield, where quality is often sacrificed in search of higher yield,” said Greg Friedman managing director of Russell’s global ETF product group. “By using quality screens embedded in the underlying transparent, rules-based indexes, we believe Russell has improved upon structural weaknesses common in traditional dividend products and brought an improved total return approach to the ETF marketplace.” HDIV charges annual expenses of 0.33% and DIVS charges 0.38%.