SmartETFs Dividend Builder ETF (DIVS)

ETF SmartETFs Dividend Builder ETF (DIVS) Summary:

Profile:

• Primary Focus: This actively managed ETF invests in U.S. dividend-paying stocks across various sectors, aiming for high current income and long-term capital growth.
• Asset Allocation: Primarily invests in equities with a focus on dividend-paying companies.
• Investment Strategy: Employs a quantitative model to select stocks based on factors like dividend yield, payout ratio, and financial health.

Objective:

• To provide investors with high current income through dividends and long-term capital appreciation.

Issuer:

• Company: SmartETFs
• Reputation and Reliability: SmartETFs is a relatively new ETF issuer launched in 2021. The company is a subsidiary of Simplify Asset Management, which has a longer track record and manages several other ETFs.
• Management: The ETF is managed by Simplify Asset Management, a team with experience in quantitative investing and ETF design.

Market Share:

• Currently, DIVS holds a small market share within the U.S. dividend ETF landscape.

Total Net Assets:

• As of October 27, 2023, DIVS has approximately $22 million in net assets.

Moat:

• The ETF's quantitative model for stock selection and active management approach could be seen as a competitive advantage.
• The focus on high-yielding dividend stocks may attract income-oriented investors.

Financial Performance:

• Since inception in November 2021, DIVS has delivered a total return of approximately 2.5%.
• The ETF has outperformed the S&P 500 Index over this period.

Growth Trajectory:

• Given its recent launch, DIVS has a limited track record to assess its long-term growth prospects.
• The increasing demand for income-generating investments could benefit the ETF.

Liquidity:

• Average Trading Volume: Around 2,500 shares per day, indicating moderate liquidity.
• Bid-Ask Spread: Around 0.10%, suggesting a relatively low trading cost.

Market Dynamics:

• Interest rate movements significantly impact dividend-paying stocks.
• Economic conditions and sector performance influence the ETF's returns.

Competitors:

• iShares Select Dividend ETF (DVY), Vanguard Dividend Appreciation ETF (VIG), SPDR S&P Dividend ETF (SDY)

Expense Ratio:

• The ETF's expense ratio is 0.45%, which is slightly higher than some comparable dividend ETFs.

Investment Approach and Strategy:

• Strategy: Actively managed, focusing on high-yielding dividend stocks selected through a quantitative model.
• Composition: Primarily holds U.S. equities, with a focus on sectors like financials, healthcare, and utilities.

Key Points:

• High dividend yield potential.
• Actively managed approach for stock selection.
• Relatively low expense ratio.
• Limited track record.
• Moderate liquidity.

Risks:

• Volatility of underlying stocks and potential dividend cuts could impact returns.
• Actively managed approach may deviate from market performance.

Who Should Consider Investing:

• Investors seeking high current income through dividends.
• Those with a long-term investment horizon.
• Investors comfortable with moderate volatility and active management strategies.

Fundamental Rating Based on AI (1-10):

6.5

Justification:

• The AI analysis considers factors like the ETF's financial performance, expense ratio, and market share.
• The rating reflects the ETF's potential for income generation and long-term growth. However, the limited track record and moderate liquidity warrant a cautious approach.

Resources:

• https://www.smartetfs.com/dividends-etf/
• https://www.nasdaq.com/market-activity/funds-and-etfs/divs

Disclaimer:

This information should not be considered financial advice. Please conduct thorough research and consult a financial professional before making investment decisions.