ETFs Based on Mergent's Dividend Achievers(TM) Meet Multiple Investment Objectives, a New White Paper Finds
07 10월 2005 - 7:43AM
PR Newswire (US)
Dividend-focused ETFs offer total return, high current yield,
capital appreciation, and international investment strategies NEW
YORK, Oct. 6 /PRNewswire/ -- A family of four exchange-traded funds
(ETFs) based on Mergent, Inc.'s Dividend Achievers index
methodology, which are now on the market, offers a wide range of
dividend-focused investment opportunities, with each ETF
appropriate for investors with specific investment objectives, a
new white paper concludes. These investment objectives include
total return, high current yield, capital appreciation and
international investing. (Logo:
http://www.newscom.com/cgi-bin/prnh/20050615/CLTU036LOGO ) Three of
these four funds began trading on the American Stock Exchange
(Amex) on September 15, 2005: Broad Dividend Achievers(TM)
Portfolio (ticker "PFM"), High Growth Rate Dividend Achievers(TM)
Portfolio ("PHJ"), and the International Dividend Achievers(TM)
Portfolio ("PID"). The fourth ETF, the PowerShares High Yield
Equity Dividend Achievers(TM) Portfolio ("PEY"), was launched on
December 9, 2004, and has grown to approximately $500 million in
assets. All four funds are run by PowerShares Capital Management,
LLC, a firm that has become well known for its developing enhanced
ETF strategies over the past several years. The research report,
titled "PowerShares Dividend Achievers(TM) Funds: Four Flavors for
Four Investment Objectives," prepared by New York-based AltaVista
Independent Research, demonstrates that the four different
dividend- focused investment strategies represented by these ETFs
have all significantly outperformed their benchmarks over the past
10 years, with lower risk/volatility, making them excellent core
investment products, depending on the investor's particular
objective. Each fund satisfies a different objective The paper then
uses the strong long-term relationship between yield and earnings
growth (described later) to distinguish among the four ETFs,
demonstrating how each fund can meet the needs of investors with
different investment objectives: - Broad Dividend Achievers (PFM)
for total return. This fund represents the "growth and income"
middle ground between the High Yield (PEY) and High Growth (PHJ)
funds. - High Yield (PEY) for yield and stability. With the highest
yield among the four ETFs, PEY is appropriate for more
conservative, income- oriented investors. - High (Dividend) Growth
Rate (PHJ) for capital gains. Going forward, anticipated faster
earnings growth should support faster share price appreciation, and
given the fund's relatively lower yields, a bigger portion of
returns are expected to come from capital gains. - International
Dividend Achievers (PID) for valuation. The case for this fund goes
beyond the diversification motivation for foreign exposure.
Valuations of these foreign securities trading on U.S. markets are
modestly cheaper than their domestic counterparts, even though
their profitability is on a par with the U.S. stocks, making this
portfolio inviting from both diversification and value standpoints.
The Dividend Achievers indexes underlying the ETFs Mergent, Inc., a
Xinhua Finance (TSE Mothers: 9399) company, which owns and
maintains the indexes underlying the ETFs, developed the
proprietary methodology that identifies Dividend Achievers -
companies that have consistently increased their regular annual
dividends to shareholders for at least the past ten or more
consecutive years (five years or longer for foreign companies).
Companies that meet this stringent requirement tend to be high
quality firms, with strong cash flows and solid balance sheets, and
with the potential for long-term outperformance. Each of the
indexes underlying these funds is calculated and published by the
AMEX every 15 seconds. The Broad Dividend Achievers Index (AMEX
ticker "DAA"), which underlies the PFM fund, tracks the aggregate
total return of all U.S. Dividend Achievers stocks. The Dividend
Achievers 50 Index (ticker "DAY"), which underlies the PEY fund,
tracks the aggregate total return of the 50 highest yielding
Dividend Achievers stocks, resulting in the highest-yielding of the
Dividend Achievers family of indexes. The High Growth Rate Dividend
Achievers Index (ticker "DAH"), which underlies the PHJ fund,
tracks the total return of the 100 Dividend Achievers with the
greatest 10-year dividend growth rate. And the International
Dividend Achievers Index (ticker "DAT"), which underlies the PID
fund, tracks the total return of approximately 50 stocks and
American Depositary Receipts (ADRs) from Canada, Europe and Asia
that both meet the Dividend Achievers requirements and trade on the
U.S. equities market. Performance of the indexes The white paper
analyzes the performance of each of these underlying Dividend
Achievers indexes, demonstrating in each case that the index has
outperformed its appropriate benchmark index for the 5- and 10-year
periods ended June 30, 2005, with less risk/volatility. This
results in higher risk- adjusted returns (a higher Sharpe ratio)
than the benchmark in each case. While the historical record
demonstrates that all four indexes have outperformed over the past
ten years, the report takes the analysis further, scrutinizing the
performance variations among the four indexes for investment
guidelines. Because the portfolio constituents of an ETF, and the
number of shares of each stock in the portfolio, are fully
transparent, the white paper's author notes that it is possible to
apply fundamental analysis to ETFs, similar to the analysis of a
single stock. By contrast, the report notes, such fundamental
analysis is not possible with mutual funds, because the
constituents of the portfolio are not fully transparent. The strong
relationship between yield and dividend/earnings growth enables the
author to distinguish among these funds, and conclude that each
fund is more appropriate for investors with specific investment
objectives. Based on the differing yield/growth characteristics for
each fund, the report concludes by showing how each fund is more
appropriate for specific investment objectives: total return, high
current yield, capital appreciation and international investing.
About Mergent Mergent, Inc., a Xinhua Finance company (TSE Mothers:
9399), is the preferred leading provider of business and financial
data on global publicly listed companies. The company is
headquartered in New York, NY, and Charlotte, NC, with sales
offices in key North American cities as well as London, Shanghai,
Tokyo, Toronto, and Sydney. Mergent's databases include information
on more than 15,000 U.S. public companies and 20,000 non-U.S.
public companies in more than 100 countries. Mergent is the
publisher of the Dividend Achievers(TM) family of indexes including
Broad, International, High Growth and Canadian. Mergent products
and services include Ford Equity Research, independent equity
research with buy, sell and hold recommendations; Mergent Online;
Mergent Manuals, Handbooks and Investment Guides; EventsData, web-
based reporting of corporate actions and events; BondSource, access
to municipal and corporate fixed income data and end-of-day
evaluation pricing. For more information, visit our websites,
http://www.dividendachievers.com/ and http://www.mergent.com/.
About Xinhua Finance Limited Xinhua Finance Limited is China's
premier financial services and media company and is listed on the
Mothers board of the Tokyo Stock Exchange (symbol: 9399) (OTC ADRs:
XHFNY). Rooted in China with a global presence, Xinhua Finance
services financial institutions, corporations and re- distributors
through four focused and complementary service lines: Indices,
Ratings, Financial News and Investor Relations. Founded in 1999 and
based in Hong Kong, the Company has 17 offices and 22 news bureaus
across Asia, Australia, North America and Europe and covers key
Chinese and international markets. For more information, please
visit http://www.xinhuafinance.com/.
http://www.newscom.com/cgi-bin/prnh/20050615/CLTU036LOGO
http://photoarchive.ap.org/ DATASOURCE: Mergent, Inc. CONTACT: Lew
Koflowitz, Strategic Design Group of NY, Inc., +1-212-924-8151, or
cell, +1-914-924-5311; or Shirley Petersen, Vice President, Index
Licensing of Mergent, Inc., +1-212-413-7751, or Web site:
http://www.mergent.com/ http://www.dividendachievers.com/
http://www.xinhuafinance.com/
Copyright