South African investment manager CoreShares has unveiled the CoreShares Global DivTrax ETF (or CoreShares S&P Global Dividend Aristocrats ETF) (GLODIV SA) on the Johannesburg Stock Exchange, providing exposure to firms listed globally which have consistently maintained or increased their dividend payments.
CoreShares celebrates the launch of the CoreShares S&P Global Dividend Aristocrats ETF (GLODIV SA) at JSE’s market opening ceremony.
The smart beta fund tracks the S&P Global Dividend Aristocrats Blend Index, a custom index devised by CoreShares based on S&P DJI‘s preeminent dividend index family.
The index is constructed by combining four country or regional indices which apply the Dividend Aristocrats methodology to equities listed in the US, Canada, Europe, or Pan Asia.
While each sub-index selects firms which are consistent dividend-payers, they do differ in terms of their total number of constituents and the minimum qualification period a stock needs to maintain or increase its dividend in order to be included. These are outlined below:
S&P 500 Dividend Aristocrats Index (50 constituents; 25 years qualification period)
S&P/TSX Canadian Dividend Aristocrats Index (87 constituents; 5 years)
S&P Europe 350 Dividend Aristocrats Index (40 constituents; 10 years)
S&P Pan Asia Dividend Aristocrats Index (98 constituents; 7 years)
The geographic weightings assigned are in line with the S&P Global Large Mid-Cap Index. As of the end of February 2018, this has resulted in the US receiving the largest weight with 50.1%, followed by Europe (24.4%), Pan Asia (22.2%), and Canada (3.3%).
Within the underlying indices, the US and Canadian constituents are given an equal weight while the European and Pan Asian constituents are yield-weighted.
Looking at back-tested data between February 2005 and the end of December 2017, the strategy has provided outperformance compared to the market cap-weighted MSCI World Index.
Over this period the S&P Global Dividend Aristocrats Blend Index has returned 16.5% per annum with a 13.3% annualized volatility compared to 13.5% return (13.8% annualized volatility) for the MSCI World.
Source: CoreShares.
GLODIV trades in South African Rand on the JSE and has a total expense ratio (TER) that will not exceed 0.70%.
CoreShares is no stranger to the Dividend Aristocrats methodology, having launched the South Africa-focused CoreShares DivTrax ETF (DIVTRX SJ) in April 2014. This fund tracks the S&P South Africa Dividend Aristocrats Index, consisting of companies that have increased or maintained stable dividends for the last seven consecutive years. Its AUM is R265 million, and its TER will not exceed 0.51%.