WisdomTree Quality Dividend Growth UCITS ETFs now available in distributing share class format…..
Sign up for our weekly Newsletter and receive the latest ETF and ETC news. Click here to register for your free copy
Nizam Hamid, ETF Strategist
Family of Dividend Growth ETFs focus on Global, US and European income strategies
WisdomTree today announced the listing of the distributing share class for the Quality Dividend Growth family which comprises the WisdomTree US Quality Dividend Growth UCITS ETF (DGRA), the WisdomTree Global Quality Dividend Growth UCITS ETF (GGRA) and the WisdomTree Eurozone Quality Dividend Growth UCITS ETF (EGRA) on the London Stock Exchange. The new ETF share classes complement an existing suite available to investors in an accumulating format.
The emphasis of the Quality Dividend Growth methodology is on the shifting trends in dividends and focuses on fundamental metrics that the company believes are associated with future dividend growth potential. These strategies use quality metrics focused on companies who are growing their dividends using the following criteria:
Growth: Long-Term Earnings Growth Expectations
Firms expected to grow their earnings faster, based on consensus analyst estimates, should have greater potential to increase future dividends.
The constituents selected by WisdomTree’s Quality Dividend Growth Indices exhibit consistently higher median dividend growth compared to market capitalisation-weighted benchmarks excluding Emerging Markets.
Quality: Combining Quality Factors to Target Earnings Inputs
Three-year average return of equity (ROE) and return on assets (ROA) figures are used to determine how efficiently firms are generating profits.
Whilst ROE offers a means of gauging profitability, it can be inflated by leverage. ROA offers a means of mitigating overleverage, and combined with ROE, offers a way of screening for sustainable earnings.
“In addition to offering an extensive range for dividend growth by geographic exposure, we’ve now introduced further flexibility for those investors who are looking for an income stream,” said Nizam Hamid, ETF Strategist. “We think the product would suit those attracted to the long term strategy returns but where income is important in the current low interest rate environment.”
In building these proprietary strategies, the company employs the same ’Buffett factors’ of return on equity (ROE) and return on assets (ROA) as a driving force for stock selection in these Quality Dividend Growth strategies, tilting towards quality companies with low debt and high return on equity.
The WisdomTree’s Quality Dividend Growth methodology places an emphasis on future dividend potential. Kenneth French and Eugene Fama’s, “A Five-Factor Asset Pricing Model” academic paper showed that the highest quality basket of stocks in the US market outperformed by 1.5% per annum from 1963 to 2016, leading to double the market’s return. Research by MSCI for the Norwegian Ministry of Finance also highlighted the benefits of focusing on income and dividends with 78.6% of equity returns over the past 10 years coming from a combination of dividend growth and dividend yield, rising to 93% over 20 years. Warren Buffet has also espoused quality traits in his long run approach to investing.
|Fund||Ticker||ISIN||Listing Currency||Base Currency|
|WisdomTree Global Quality Dividend Growth UCITS ETF – USD||GGRW||IE00BZ56RN96||USD||USD|
|WisdomTree Global Quality Dividend Growth UCITS ETF – USD||GGRP||IE00BZ56RN96||GBx||USD|
|WisdomTree Global Quality Dividend Growth UCITS ETF – USD Acc||GGRA||IE00BZ56SW52||USD||USD|
|WisdomTree Global Quality Dividend Growth UCITS ETF – USD Acc||GGRG||IE00BZ56SW52||GBx||USD|
|WisdomTree US Quality Dividend Growth UCITS ETF – USD||DGRW||IE00BZ56RD98||USD||USD|
|WisdomTree US Quality Dividend Growth UCITS ETF – USD||DGRP||IE00BZ56RD98||GBx||USD|
|WisdomTree US Quality Dividend Growth UCITS ETF – USD Acc||DGRA||IE00BZ56RG20||USD||USD|
|WisdomTree US Quality Dividend Growth UCITS ETF – USD Acc||DGRG||IE00BZ56RG20||GBx||USD|
|WisdomTree Eurozone Quality Dividend Growth UCITS ETF – EUR||EGRW||IE00BZ56SY76||EUR||EUR|
|WisdomTree Eurozone Quality Dividend Growth UCITS ETF – EUR||EGRP||IE00BZ56SY76||GBx||EUR|
|Eurozone Quality Dividend Growth UCITS ETF – EUR Acc||EGRA||IE00BZ56TQ67||EUR||EUR|
|Eurozone Quality Dividend Growth UCITS ETF – EUR Acc||EGRG||IE00BZ56TQ67||GBx||EUR|