WisdomTree, the exchange-traded fund (“ETF”) and exchange-traded product (“ETP”) sponsor 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
|WisdomTree Global Quality Dividend Growth UCITS ETF – USD Acc||GGRG||IE00BZ56SW52
|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
|WisdomTree US Quality Dividend Growth UCITS ETF – USD Acc||DGRG||IE00BZ56RG20
|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|
* September 2014
** Global Markets & Return Drivers, Abhishek Gupta, Dimitris Melas, Raghu Suryanarayanan, and Andras Urban (February 2016)
Notes to Editors
About WisdomTree Europe Ltd.
WisdomTree Investments, Inc., through its subsidiaries in the U.S., Europe, Japan and Canada (collectively, “WisdomTree”), is an exchange-traded fund (“ETF”) and exchange-traded product (“ETP”) sponsor and asset manager. WisdomTree offers products covering equities, fixed income, currencies, commodities and alternative strategies. Through WisdomTree Europe Ltd, it sponsors WisdomTree UCITS ETFs and Boost short and leverage ETPs. WisdomTree currently has approximately $38.8bn (as of 30 September 2016) in assets under management globally. For more information, please visit www.wisdomtree.com.
WisdomTree® is the marketing name for WisdomTree Investments, Inc. and its subsidiaries worldwide.
WisdomTree Europe Ltd is an appointed representative of Mirabella Advisers LLP, which is authorised and regulated by the Financial Conduct Authority.
The products discussed in this document are issued by WisdomTree Issuer PLC (the “Issuer”), an umbrella investment company with variable capital having segregated liability between its funds and organised under the laws of Ireland as a public limited company. The Issuer has been authorised by the Central Bank of Ireland (the “CBI”) as a UCITS pursuant to the European Communities (Undertaking for Collective Investment in Transferable Securities) Regulations, 2003 (as amended) and shall issue a separate class of shares (“Shares”) representing each fund. Investors should read the prospectus of the Issuer (“Prospectus”) before investing and should refer to the section of the Prospectus entitled “Risk Factors” for further details of risks associated with an investment in the Shares. Any decision to invest should be based on the information contained in the Prospectus and after seeking independent investment, tax and legal advice.
The Shares are products involving a significant degree of risk and may not be suitable for all types of investor. Any decision to invest should be based on the information contained in the Prospectus. The price of any securities may go up or down and an investor may not get back the amount invested. Past performance is not a reliable indicator of future performance. Any historical performance included in this document may be based on back testing. Back testing is the process of evaluating an investment strategy by applying it to historical data to simulate what the performance of such strategy would have been. However, back tested performance is purely hypothetical and is provided in this document solely for informational purposes. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance.
This document may contain independent market commentary prepared by WTE based on publicly available information. WisdomTree Europe does not warrant, guarantee or otherwise confirm the accuracy or correctness of any information contained herein and any opinions related to product or market activity may change. This marketing information is intended for professional clients & sophisticated investors (as defined in the glossary of the FCA Handbook) only.