Touchstone ETF Trust - Touchstone Dividend Select ETF (DVND)

Overview

The Touchstone Dividend Select ETF (DVSL) is an actively managed ETF focusing on dividend-paying equities. It aims to generate current income and capital appreciation by investing in a diversified portfolio of U.S. companies believed to have a strong history and potential for sustainable dividend payments. The ETF targets companies with solid fundamentals and attractive dividend yields.

Reputation and Reliability

Touchstone Investments, a firm within the Western Asset Management family, has a reputation for providing a range of investment products. While not as large as some mega-asset managers, they have a established presence in the ETF market.

Management Expertise

The ETF is managed by Touchstone, leveraging the expertise of its investment professionals who conduct fundamental research to identify dividend-paying stocks.

Goal

To provide investors with current income and long-term capital appreciation through investments in dividend-paying U.S. equity securities.

Investment Approach and Strategy

Strategy: This is an actively managed ETF. The fund managers employ a bottom-up, fundamental research approach to select individual securities, rather than tracking a specific index.

Composition The ETF primarily holds U.S. common stocks of companies that pay dividends. The specific composition varies based on the fund's research and market outlook.

Market Share: Information on specific market share for this niche ETF is not readily available. Its market share is likely small compared to broad-market dividend ETFs.

Total Net Assets (AUM): 400000000

Key Competitors

• Vanguard Dividend Appreciation ETF (VIG)
• Schwab U.S. Dividend Equity ETF (SCHD)
• WisdomTree U.S. High Dividend Fund (DHS)

Competitive Landscape

The dividend ETF space is highly competitive, with many well-established and low-cost index-tracking ETFs dominating. DVSL's active management strategy is its differentiator but also a potential disadvantage against passive ETFs due to higher fees and the challenge of consistently outperforming. Its advantage lies in the potential for manager skill to identify undervalued dividend opportunities, while disadvantages include higher expense ratios and the inherent risks of active management.

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Benchmark Comparison: The ETF's performance relative to its benchmark (e.g., S&P 500 or a dividend-focused index) would need to be assessed against specific benchmark data, but actively managed funds often face the challenge of tracking error and underperformance.

Expense Ratio: 0.75

Average Trading Volume

The average daily trading volume for DVSL is typically moderate, suggesting it is reasonably liquid for most retail investors but may experience wider bid-ask spreads during periods of low trading activity.

Bid-Ask Spread

The bid-ask spread for DVSL can fluctuate based on market conditions and trading volume; however, it is generally within acceptable ranges for a mid-sized ETF.

Market Environment Factors

Interest rate environments, inflation, corporate earnings, and overall economic growth significantly influence dividend-paying stocks. A rising interest rate environment can make dividend yields less attractive compared to bonds, while strong corporate earnings support dividend sustainability and growth.

Growth Trajectory

The growth of DVSL is tied to the performance of its underlying dividend-paying stock holdings and investor demand for income-generating equities. Changes in management strategy or significant shifts in holdings would be reflected in its composition and performance.

Competitive Edge

DVSL's competitive edge stems from its active management approach, aiming to identify high-quality dividend-paying companies with sustainable payout growth. The managers conduct in-depth fundamental analysis to find undervalued opportunities that might be overlooked by passive index funds. This selectivity allows for potential outperformance and a focus on companies with strong balance sheets and competitive moats.

Volatility

The ETF's historical volatility is moderate, reflecting the inherent risks of equity markets and the dividend-paying sector. It is expected to be less volatile than broad growth stock ETFs but more volatile than bond ETFs.

Market Risk

The primary market risks include general stock market downturns, sector-specific risks affecting its holdings, and the risk that dividend-paying companies may cut or suspend dividends due to financial distress or adverse economic conditions.

Ideal Investor Profile

The ideal investor for DVSL is an individual seeking to supplement their portfolio with income-generating assets. This includes retirees, those nearing retirement, or investors looking for a steady stream of dividends with potential for capital appreciation.

Market Risk

DVSL is best suited for long-term investors who prioritize income generation and are comfortable with the risks associated with equity investments. It is less suitable for short-term traders seeking rapid price gains.

The Touchstone Dividend Select ETF (DVSL) is an actively managed fund focused on U.S. dividend-paying stocks, aiming for income and capital appreciation. While it offers potential manager alpha through fundamental research, it faces stiff competition from lower-cost passive ETFs. Investors seeking a dividend-focused strategy with active management oversight might consider DVSL, provided they understand its associated fees and risks.

Data Sources:

• Touchstone Investments Official Website
• Financial Data Aggregators (e.g., Morningstar, ETF.com)

Disclaimers:

This information is for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Investors should consult with a qualified financial advisor before making any investment decisions. ETF data, including AUM, expense ratios, and performance, can change frequently.