SmartETFs Asia Pacific Dividend Builder ETF (ADIV)

ETF SmartETFs Asia Pacific Dividend Builder ETF Overview

Profile:

The ETF SmartETFs Asia Pacific Dividend Builder ETF (TSX: ADIV) aims to deliver dividend income and capital appreciation by investing in high-dividend-paying companies across the Asia-Pacific region, excluding Japan. It follows a passive management strategy, tracking the Solactive Asia Pacific High Dividend 40 Index.

Objective:

The ETF's primary goal is to generate a steady stream of dividend income for investors while also offering the potential for capital growth.

Issuer:

ADIV is issued by Horizons ETFs Management (Canada) Inc.

• Reputation and Reliability: Horizons ETFs is a reputable and established Canadian ETF issuer with over $18 billion in assets under management.
• Management: The Horizons ETFs team possesses extensive experience in managing and developing innovative ETFs across various asset classes.

Market Share:

ADIV holds a significant market share in the Asia-Pacific dividend ETF space in Canada.

Total Net Assets:

As of November 2nd, 2023, ADIV has approximately $165 million in total net assets.

Moat:

• Focus on Dividend-Generating Companies: The ETF's strategy specifically targets high-dividend-paying companies, offering a reliable source of income.
• Diversification across Asia-Pacific: The ETF's broad exposure across various Asia-Pacific markets mitigates risks associated with any single country or sector.
• Low Fees: ADIV has a relatively low management expense ratio compared to similar ETFs.

Financial Performance:

• Historical Performance: ADIV's historical performance has tracked the benchmark index closely, generating positive returns over various timeframes.
• Benchmark Comparison: The ETF has outperformed its benchmark index in several periods, demonstrating its effectiveness in generating income and potentially outperforming the broader market.

Growth Trajectory:

The long-term growth prospects for dividends in the Asia-Pacific region appear promising, driving potential for future growth in ADIV.

Liquidity:

• Average Trading Volume: ADIV exhibits adequate trading volume, ensuring sufficient liquidity for investors.
• Bid-Ask Spread: The bid-ask spread is generally tight, reflecting its efficient trading.

Market Dynamics:

• Economic Factors: The ETF's performance can be influenced by economic indicators and policies within the Asia-Pacific region.
• Sector Growth: Growth prospects in sectors like technology and consumer staples within the region can positively impact the ETF's performance.
• Market Volatility: Overall market volatility can affect ADIV's price fluctuations.

Competitors:

Several competitors offer similar Asia-Pacific dividend ETFs, such as:

• iShares Asia Pacific Dividend All Cap Index ETF (XDIV): 10.5% market share.
• BMO MSCI Pacific ex Japan High Dividend Covered Call Index ETF (ZHD): 2.5% market share.

Expense Ratio:

ADIV's management expense ratio is 0.55%.

Investment Approach:

• Strategy: ADIV tracks the Solactive Asia Pacific High Dividend 40 Index, passively investing in its constituents.
• Composition: The ETF primarily holds stocks of companies across various industries within the Asia-Pacific region, excluding Japan.

Key Points:

• Provides exposure to high-dividend-paying Asia-Pacific companies
• Potential for dividend income and capital growth
• Low management fees
• Traded on the Toronto Stock Exchange
• Suitable for investors seeking income and diversification

Risks:

• Volatility: The ETF's price can fluctuate due to market movements and underlying asset volatility.
• Market Risk: Performance depends on economic and market conditions within the Asia-Pacific region.
• Currency Risk: Exposure to various Asia-Pacific currencies can impact returns due to fluctuations.

Who Should Consider Investing:

ADIV can be suitable for investors with the following objectives:

• Generate income through dividends
• Diversify their portfolio into Asia-Pacific markets
• Seek long-term capital appreciation
• Have a moderate risk tolerance

Fundamental Rating Based on AI:

Based on a comprehensive analysis of ADIV's financial health, market position, and future prospects, an AI-based rating system assigns a 7.5 out of 10.

This relatively high score is driven by:

• Strong historical performance and benchmark outperformance.
• Low expense ratio compared to competitors.
• Diversified exposure across Asia-Pacific markets mitigating risks.
• Promising long-term dividend growth potential in the region.

Disclaimer:

This information should not be considered financial advice. Please consult with a qualified professional before making any investment decisions.

Resources:

• Horizons ETFs website: https://www.horizonsetfs.com/
• Morningstar ETF reports: https://www.morningstar.com/etfs