ETF Intel Q&A: Dividend Assets Capital

Gabrielle Vennitti, Head of ETF Listings at Nasdaq, speaks with Marc Saurborn, CEO, Dividend Assets Capital, on the DAC 3D Dividend Growth ETF (DVGR) and its investment approach.

1. Why is dividend growth so important when it comes to investing?

Our unique dividend growth investment philosophy, both in DVGR and for clients since our firm’s founding, has proven itself for decades. Known as “3D-Double Digits for a Decade or More ” ^TM investing, it is based on the belief that companies that declare dividends and increase those dividends substantially and consistently, year after year, tend to perform uncommonly well for reasons beyond dividends alone.

As we know, dividends have been a major contributor to equity returns—accounting for about 38% of annualized total returns for the S&P 500 since 1930 (and just under 18% during the 2010s).*  In the 1930s, economist John Burr Williams, an early champion of fundamental analysis, demonstrated that a stock’s intrinsic value is the present value of its future cash flows—specifically, its future dividends.  Building on his foundation, though, reveals two important additional observations:

• Companies that consistently grow their dividends have tended to outperform the broader market by a significant margin, suggesting that their relative strength reflects factors beyond their dividend growth alone.
• Companies that have consistently grown their dividends over long periods of time have delivered strong financial results and demonstrated superior market returns.**

* Source: S&P Dow Jones Indices, Ned Davis Research. Data from 1/1/1930–12/31/2025. S&P 500 Index inception date: March 4, 1957; earlier data reflects predecessor index history.

Dividend Growers Have Outperformed Significantly
S&P 500 Total Returns by Dividend Policy Since 1973, Indexed to 100 (Log Scale)

**Source: S&P Dow Jones, Ned Davis. Data from 2/1/1973-12/31/2025. Returns based on monthly equal-weighted geometric average returns of S&P 500 component stocks with components reconstituted monthly. For informational purposes only.  Not meant to represent the Fund.  Past performance does not guarantee future results.  The index is unmanaged, does not incur fees or expenses, and is not available for direct investment.

2. Tell us how you incorporate this approach into your ETF, DVGR

Since past performance, by definition, is backward-looking and may not necessarily be indicative of future results, our more than 20 years of successful dividend investing have been driven by three core principles:

First, screen rigorously and consistently
Our “3D” Dividend Growth investment philosophy evaluates key financial metrics holistically, continuously, and from multiple perspectives.

• Dividend Growth: We begin by identifying companies that have grown their dividends over time. Applied consistently and prudently, we believe these screens are highly beneficial given the data on dividend growers.
• By Double Digits: These same companies must have consistently increased their dividends, on average, by at least 10% per year—with no cuts or years without a dividend increase. Some strategies consider companies with the highest dividends as outliers and automatically screen them out. In contrast, we view these as potentially important opportunities.
• For a Decade, or More: Many companies can sustain dividend increases for a limited time. However, our extended growth timeline separates the “fakers” from the “makers,” balancing recency with our longer-term investment horizon.

Second, combine screens with fundamental analysis 
Importantly, dividend growth must be supported by healthy cash flows, strong balance sheets, and management’s commitment to returning capital to shareholders. We consider it essential to integrate our disciplined screening process with years of fundamental research and portfolio management experience to deliver consistent, long-term investment results across all market cycles.

Third, continually monitor and assess
Because businesses evolve over time, an essential part of our investment process is to continually evaluate the companies in our investment portfolios. This regular review assesses whether a company’s financial health, competitive position, and strategic direction remain aligned with our original investment thesis.

3. How should investors utilize DVGR?

With equity markets at or near record highs, valuations remain stretched, and inflation has once again proven more stubborn than many expected. For more than 20 years, investors have relied on DAC to help build wealth by generating consistently growing income streams, supporting retirement goals, and helping mitigate market volatility. As we often like to say at DAC, given our long history, “dividends are in our DNA.”

Now is an opportune time to reassess the roles that quality and dependability play in long-term equity investing. We believe our disciplined, dividend growth approach to investing is well aligned with current market conditions and, importantly, the opportunities that lie ahead.

Important Information

The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. This and other important information is contained in the prospectus, which may be obtained by visiting https://dacapitaletf.com/or by calling +1.843.645.9700. Read it carefully before investing.

Dividend-Paying Securities Risk. Investment in dividend-paying securities could cause the Fund to underperform similar funds that invest without consideration of a company’s track record of paying dividends. Securities of companies with a history of paying dividends may not participate in a broad market advance to the same degree as most other securities, and a sharp rise in interest rates or economic downturn could cause a company to unexpectedly reduce or eliminate its dividend. There is no guarantee that the issuers of the securities held by the Fund will declare dividends in the future or that, if declared, they will remain at their current levels or increase over time.

Equity Investing Risk. An investment in the Fund involves risks similar to those of investing in any fund holding equity securities, such as market fluctuations, changes in interest rates and perceived trends in stock prices.

Investment Risk. When you sell your Shares, they could be worth less than what you paid for them. The Fund could lose money due to short-term market movements and over longer periods during market downturns.

Management Risk. The Fund is actively managed and may not meet its investment objective based on the Adviser’s or Sub-Adviser’s success or failure to implement investment strategies for the Fund. The Sub-Adviser’s evaluations and assumptions regarding investments may not successfully achieve the Fund’s investment objective given actual market trends. In addition, there is the risk that the Sub-Adviser’s investment process, techniques and analyses will not produce the desired investment results and the Fund may lose value as a result.

New Fund Risk. The Fund is a recently organized investment company with no operating history. As a result, prospective investors have no track record or history on which to base their investment decision. There can be no assurance that the Fund will grow to or maintain an economically viable size.

New Sub-Adviser Risk. Although the Sub-Adviser’s principals and the Fund’s portfolio managers have experience managing investments in the past, the Sub-Adviser has limited experience managing investments for an ETF, which may limit the Sub-Adviser’s effectiveness.

Non-Diversification Risk. Because the Fund is non-diversified, it may be more sensitive to economic, business, political or other changes affecting individual issuers or investments than a diversified fund, which may result in greater fluctuation in the value of the Shares and greater risk of loss.

Sector Risk. To the extent the Fund invests more heavily in particular sectors of the economy, its performance will be especially sensitive to developments that significantly affect those sectors. The Fund may invest a significant portion of its assets in the following sectors, and therefore, the Fund may be susceptible to the following sector-specific risks.

An investment in the Fund involves risk, including possible loss of principal. Exchange traded funds (ETFs) trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETF’s net asset value (NAV), and are not individually redeemed directly with the ETF. Broker commissions will reduce returns. ETFs will experience returns similar to that of their respective index, less fees and expenses. ETFs use a variety of strategies, complex or simple, that may impact returns depending on market conditions. For a complete description of the Fund’s principal investment risks, please refer to the prospectus.

The Fund is distributed by PINE Distributors LLC. The Fund’s investment adviser is Empowered Funds, LLC, which is doing business as ETF Architect. Dividend Assets Capital, LLC serves as the Sub-adviser to the Fund. PINE Distributors LLC is not affiliated with ETF Architect or Dividend Assets Capital, LLC.

This information is for illustrative purposes. Material presented has been derived from sources considered to be reliable, but the accuracy and completeness cannot be guaranteed. Nothing contained in this document may be relied upon as a guarantee, promise, assurance, or representation as to the future.

Dividend Assets Capital, LLC (“DAC”) is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about DAC investment advisory services can be found in its Form ADV Part 2, which is available upon request.

You should carefully consider the investment objectives, potential risks, management fees, and charges and expenses before investing. The Firm’s Investment Adviser Brochure, Form ADV Part 2, contains this and other information about the Firm, and should be read carefully before investing. You may obtain a current copy of DAC’s Form ADV Part 2 by visiting our website at dacapitalsc.com, emailing info@dacapitalsc.com, or by calling us at (866) 348-4769. Additional information about Dividend Assets Capital, LLC is also available on the United States Securities and Exchange Commission’s website at adviserinfo.sec.gov.

ETFAC-5266346-05/26.