Guinness Atkinson Asset Management has two funds in its dividend ETF lineup to meet the needs of investors looking for both capital appreciation and income – two qualities particularly hard to find in the current environment.
The SmartETFs Asia Pacific Dividend Builder ETF (ADIV) and the SmartETFs Dividend Builder ETF (DIVS) offer actively managed exposure to high-quality dividend stocks in different regions.
DIVS primarily provides exposure to the United States, United Kingdom, among a few western European countries, according to ETF Database.
ADIV offers exposure to China, Taiwan, Hong Kong, Australia, and other Asia Pacific countries, according to ETF Database.
SmartETFs holds a set number of positions in each of its portfolios, typically 30 or 35 holdings, and each fund follows an equal-weight approach. Equal weights help manage stock-specific risk.
As stocks move up and down relative to each other the weightings change slightly, Guinness Atkinson will re-balance as circumstances dictate. However, the firm does not re-balance slavishly as they seek to reduce transaction costs and keep the turnover low – a benefit for investors.
SmartETFs has a strong investment culture as a firm. Looking at the durability of the firm's product roster, 100% of SmartETFs products have both survived and beaten their respective category median over the past 10 years, as denoted by the firm's 10-year success ratio, according to Morningstar.
“A high success ratio not only indicates good performance but also provides insight on a firm’s discipline around investment strategy and product development. It's encouraging to see SmartETFs showcase strong risk-adjusted performance, across its entire product lineup, with an average 10-year Morningstar Rating of 4.0 stars,” Morningstar wrote.
Both funds focus on quality companies offering growing, sustainable dividends.
ADIV, in particular, leans toward smaller, deeper value companies than its average peer in the Pacific/Asia ex-Japan Stk Morningstar Category. ADIV favors high-quality stocks, which can improve downside risk protection because it entails holding consistently profitable, growing companies with solid balance sheets, according to Morningstar.
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