Published Sun, 09 Jun 2019 09:17:46 -0400 on Seeking Alpha
Domestic dividends continue growing and many investors continue favoring dividend stocks and exchange-traded funds, but while dividend payers are historically defensive, there is still equity risk associated with the asset class.
The QuantShares Hedged Dividend Income ETF (NYSEARCA: DIVA) is an ETF that can help reduce some of the equity risk that comes with dividend investing. DIVA tracks the INDXX Hedged Dividend Income Index, which is designed to deliver to investors a strong current yield capital appreciation potential with a risk profile similar to a corporate bond index, according to AGFIQ.
DIVA, which debuted over four years ago, aims to deliver a risk profile that is comparable to investing in high-grade corporate bonds.
DIVA's underlying index "invests in stocks with stable or growing dividends that trade at high yields; to reduce risk the Index shorts stocks in each sector which have unstable or low dividends," according to Bloomberg.
DIVA also employs a long/short strategy to take advantage of some of the volatility associated with low or volatile dividends. The fund "provides 100% long exposure to stocks with stable or growing dividends that trade at high yields and 50% short exposure to stocks with unstable or low dividends," according to the issuer.
DIVA ETF Due Diligence DIVA holds 100 equally weighted securities within the universe of the largest 1,000 US stocks that have paid consistent or growing dividends and which have the highest dividend... Read more