MarketDesk Focused U.S. Dividend ETF
A quantitative dividend strategy focused on systematically generating above-average income without sacrificing upside potential. The strategy's data-driven methodology draws upon statistics and fundamental data to objectively select securities. FDIV's repeatable framework aims to identify 60 to 80 companies that offer (1) a high dividend yield and (2) a high potential for capital appreciation.
A Pioneer in Quantitative Dividend Investing
MarketDesk is a leader in quantitative dividend investing. While traditional dividend strategies screen companies based on dividend yield and quality metrics, our data-driven methodology utilizes a more comprehensive approach. Our quantitative process is designed to identify companies with both a higher dividend yield and a higher Potential for Capital Appreciation.
Why Dividend Investing? ¹
Dividends played an important role in the returns that investors received during the past 50 years. Going back to 1960, 84% of the total return of the S&P 500 Index can be attributed to reinvested dividends and the power of compounding. Dividend income is an important factor that can help build wealth over time.
Reducing Market Volatility
Dividends can play an important role in reducing overall portfolio risk and volatility. Despite often being labeled as old and boring, companies that grow dividends have historically participated in market rallies. In terms of reducing risk, dividend-paying companies historically are more stable, which can help manage risk during selloffs². Additionally, dividend income can mitigate losses that occur from a decline in stock price.
Calculating a Stock's Potential for Capital Appreciation
With over 1,000 U.S. companies paying dividends, which dividend stocks should you own? Companies with higher yields may underperform, while high-quality companies with lower yields provide less income. FDIV's innovative strategy aims to solve this yield vs capital appreciation dilemma for investors.
FDIV's algorithm analyzes the current market environment, taking in thousands of data points to forecast each company's dividend yield. The investment universe is then ranked by the confidence level and margin of safety between the current and projected yields. This chart provides an illustrative example of this process. FDIV's quantitative strategy aims to own companies in the top right box that offer (1) a high dividend yield and (2) a high potential for capital appreciation.
1) Index performance is not indicative of Fund performance, nor is it an indication of how a Fund could or will perform. An investment cannot be made directly into an Index. Past performance is not a guarantee of future results. Indexes are unmanaged and one cannot invest directly in an index. Dividend-paying stocks are not guaranteed to outperform non-dividend-paying stocks in a declining, flat, or rising market. For illustrative purposes only. The chart graphs the growth of $10,000 from January 1960 to June 2023. Data Source: MarketDesk.
2) Past performance does not guarantee future results. Indexes are unmanaged and one cannot invest directly in an index. Dividend-paying stocks are not guaranteed to outperform non-dividend-paying stocks in a declining, flat, or rising market. Dividend Growers is based on the S&P 500 Dividend Aristocrats Index. Performance is based on total returns using monthly data points from December 1990 to June 2023. Data Source: MarketDesk.