New Russell ETFs Offer High Dividend Yield Exposure
March 15 2012 - 9:20AM
Business Wire
Global asset manager Russell Investments launched two high
dividend yield exchange-traded funds (ETFs) today on the NYSE Arca,
expanding on its line-up of next-generation solutions with focused
exposure to quality companies that demonstrate higher dividend
yields. The Russell High Dividend Yield ETFs are yield-focused
products that seek to deliver more predictable returns, while
offering an alternative to currently lower yielding fixed income
products.
The Russell High Dividend Yield ETF (HDIV) and Russell
Small Cap High Dividend Yield ETF (DIVS) seek to track the
market capitalization-weighted Russell U.S. Large Cap High Dividend
Yield and Russell U.S. Small Cap High Dividend Yield Indexes,
respectively. 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. We’ve leveraged the
best of Russell’s core capabilities to offer investors an
efficient, cost-effective way to access high-dividend-paying,
quality-oriented companies.”
“Russell research has shown that a total return approach that
relies on a combination of dividends and capital appreciation can
offer a more advantageous investment outcome than a simple
dividend-yield strategy,” said David Koenig, investment
strategist at Russell. “Focusing solely on dividend yield runs the
risk of selecting securities that may have high dividend yields
because they may be distressed and their price is falling or
choosing companies that finance dividend payouts with debt.”
Today’s announcement follows the 2011 launch of the Russell
Investment Discipline ETFs and the Russell Factor ETFs, as well as
the re-brand of the Russell One Fund ETF. With the addition of the
High Dividend Yield ETFs, Russell currently offers 26
next-generation ETFs in the U.S. market. To learn more about the
Russell High Dividend Yield ETFs and Russell’s entire ETF line-up,
visit www.russelletfs.com. To learn more about the underlying index
methodology, visit www.russell.com/indexes/russell-high-dividend-yield.
About Russell Investments
Russell Investments (Russell) is a global asset manager and one
of only a few firms that offer actively managed multi-asset
portfolios and services that include advice, investments and
implementation. Working with institutional investors, financial
advisors and individuals, Russell’s core capabilities extend across
capital markets insights, manager research, Indexes, portfolio
implementation and portfolio construction.
Russell has about $141 billion in assets under management (as of
12/31/11) and works with 2,300 institutional clients, more than 500
independent distribution partners and advisors, and individual
investors globally. As a consultant to some of the largest pools of
capital in the world, Russell has $2 trillion in assets under
advisement (as of 6/30/11). It has four decades of experience
researching and selecting investment managers and meets annually
with more than 3,000 managers around the world. Russell traded $1.5
trillion in 2010 through its implementation services business.
Russell calculates more than 90,000 benchmarks daily covering 98%
of the investable market globally, 85 countries and more than
10,000 securities. Approximately $3.9 trillion in assets are
benchmarked to the Russell Indexes.
Russell is headquartered in Seattle, Washington, USA and has
offices in Amsterdam, Auckland, Beijing, Chicago, Dubai, Frankfurt,
London, Melbourne, Milan, New York, Paris, San Francisco, Seoul,
Singapore, Sydney, Tokyo and Toronto. For more information about
how Russell helps to improve financial security for people, visit
www.russell.com or follow us @Russell_News.
Investors should carefully consider the investment objectives,
risks, charges and expenses before investing in Russell ETFs. This
and other information can be found in the prospectus, which may be
obtained by calling 888-RSL-ETFS (888-775-3837) or by downloading
the file from russelletfs.com. Please read the prospectus carefully
before investing.
ETFs are subject to risks similar to those of stocks, including,
if applicable, those related to short-selling and margin account
maintenance. There is no guarantee that dividends will be paid. If
stocks held by the ETF reduce or stop paying dividends, the ETF’s
ability to generate income may be affected. The ETFs are passively
managed and may not match or achieve a high degree of correlation
with the return of their corresponding index. As with all
investments, there are certain risks of investing in an ETF, and
you could lose money on an investment in an ETF.
Small cap investments are subject to considerable price
fluctuations and are more volatile than large cap stocks. Investors
should consider the additional risks involved in small cap
investments.
Not FDIC Insured. May Lose Value. Not Bank
Guaranteed.
Russell ETFs and their corresponding indexes are new and have
limited operating history. There is no assurance the investment
process will consistently lead to successful investing. There is no
assurance the stated objectives will be met.
Shares of Russell ETFs are not individually redeemable and may
trade at a discount or premium to their net asset value (“NAV”).
Shares may be purchased and redeemed in Creation Units only,
typically consisting of aggregations of 100,000 shares. Investors
may purchase or sell ETF shares throughout the day on an exchange
through a securities brokerage account. All ETFs are subject to
management fees and expenses.
Russell ETFs are distributed by ALPS Distributors, Inc.
(“ALPS”). Russell Investment Management Company (“RIMCo,” dba
Russell Investments) serves as the investment advisor to the ETFs.
ALPS and RIMCo are separate and unaffiliated. Neither ALPS nor
RIMCo nor any of their affiliates provides tax advice.