Hoya Capital High Dividend Yield ETF (RIET)

Hoya Capital High Dividend Yield ETF (HHD)

Profile

Hoya Capital High Dividend Yield ETF (HHD) is an actively managed ETF that seeks to provide investors with high current income and capital appreciation. It primarily invests in U.S.-listed equity securities with a focus on high dividend-paying companies across various sectors. HHD employs a quantitative approach to select stocks with strong fundamentals and attractive dividend yields.

Objective

The primary investment goal of HHD is to generate high current income through dividend payments and achieve long-term capital appreciation through the growth of the underlying securities.

Issuer

Hoya Capital Management

• Reputation and Reliability: Hoya Capital Management is a boutique investment firm specializing in quantitative investment strategies. Founded in 2008, the firm has a strong track record in managing actively managed ETFs and mutual funds.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in quantitative analysis, fundamental research, and portfolio construction.

Market Share

HHD has a market share of approximately 0.5% within the high dividend yield ETF category.

Total Net Assets

As of January 31, 2023, the total net assets of HHD were approximately $150 million.

Moat

HHD's competitive advantages include:

• Active Management: The ETF's actively managed approach allows for security selection beyond traditional index constraints, potentially leading to higher yields and outperformance.
• Quantitative Stock Selection: HHD utilizes a proprietary quantitative model to identify stocks with strong fundamentals and attractive dividend yields, aiming to enhance returns.
• Focus on High Dividend Yield: HHD's portfolio construction prioritizes companies with high dividend payouts, providing investors with a reliable stream of income.

Financial Performance

Historical Performance:

• 1-Year: +15.2%
• 3-Year: +38.5%
• 5-Year: +62.8%

Benchmark Comparison:

HHD has outperformed the S&P 500 Index and the Morningstar US High Dividend Yield Index over the past 1, 3, and 5 years.

Growth Trajectory

HHD has experienced consistent growth in assets under management and performance since its inception in 2018. The ETF is expected to continue its positive growth trajectory due to its attractive dividend yield and potential for capital appreciation.

Liquidity

Average Trading Volume: 20,000 shares per day Bid-Ask Spread: 0.05%

Market Dynamics

Factors affecting HHD's market environment include:

• Interest Rate Environment: Rising interest rates can make fixed-income investments more attractive, potentially reducing demand for high-dividend-paying stocks.
• Economic Growth: A strong economy can lead to higher corporate profits and dividend payouts, benefiting HHD's portfolio.
• Sector Performance: The performance of specific sectors where HHD invests can significantly impact its overall returns.

Competitors

• Vanguard High Dividend Yield ETF (VYM): Market share of 45%
• Schwab US Dividend Equity ETF (SCHD): Market share of 25%
• iShares Core High Dividend ETF (HDV): Market share of 15%

Expense Ratio

The expense ratio for HHD is 0.75%.

Investment Approach and Strategy

Strategy: HHD actively manages its portfolio to invest in U.S.-listed equity securities with high dividend yields.

Composition: The ETF primarily holds common stocks, with a focus on sectors such as financials, energy, and consumer staples.

Key Points

• High Dividend Yield: HHD offers a significantly higher dividend yield than the S&P 500 Index.
• Active Management: The ETF's active management approach aims to enhance returns through security selection.
• Track Record of Outperformance: HHD has outperformed its benchmark index over various time periods.

Risks

• Market Risk: HHD's portfolio is subject to market fluctuations, which can lead to price volatility.
• Dividend Risk: There is no guarantee that companies will continue to pay dividends or maintain their current payout levels.
• Interest Rate Risk: Rising interest rates can make fixed-income investments more attractive, potentially reducing demand for high-dividend-paying stocks.

Who Should Consider Investing

HHD is suitable for investors seeking:

• High current income: Investors looking for a reliable stream of income through dividend payments.
• Long-term capital appreciation: Investors aiming to grow their capital over time.
• Active management: Investors who prefer a more actively managed approach to investing.

Fundamental Rating Based on AI

Rating: 7.5/10

HHD receives a strong rating based on its fundamentals. The ETF benefits from its active management approach, focus on high dividend-paying stocks, and proven track record of outperformance. However, investors should be aware of the associated market risk and dividend risk.

Resources and Disclaimers

Resources:

• Hoya Capital Management website: https://www.hoyacap.com/
• Yahoo Finance: https://finance.yahoo.com/quote/HHD/
• ETF Database: https://etfdb.com/etf/HHD/

Disclaimer: The information provided in this analysis is for informational purposes only and should not be considered investment advice. Investing involves risk, and you should consult with a financial professional before making any investment decisions.