LEAD: new US Dividend Growth ETF by Reality Shares

Reality Shares begun trading the Reality Shares DIVCON Leaders Dividend ETF (BATS: LEAD) on Wednesday, January 06, 2015. Here is a synopsis of the new ETF:


Symbol: LEAD  Exchange: BATS
Name: Reality Shares DIVCON Leaders Dividend ETF Net Expense Ratio: 0.43%


The Reality Shares DIVCON Leaders Dividend ETF seeks long-term capital appreciation by tracking the performance, before fees and expenses, of the Reality Shares DIVCON Leaders Dividend Index.

The Reality Shares DIVCON Leaders Dividend Index is designed to capitalize on the theory that, over time, companies that consistently grow their dividends tend to have investment returns above the overall market. The Benchmark Index is designed to select the companies that have the highest probability of increasing their dividend in a 12-month period. These probabilities are determined by Reality Shares’ DIVCON Scoring system, which is a proprietary, rules-based scoring and weighting methodology, and are expressed as a DIVCON Score and DIVCON Rating for each company.

The DIVCON Scoring system begins by identifying the 500 largest U.S. companies based on market capitalization as of the Benchmark Index reconstitution date and then narrows this universe to those companies that paid an ordinary dividend and announced a future dividend payment during the 12 months preceding such date. The DIVCON Scoring system analyzes quantitative factors that Reality Shares has determined to be correlated to a company’s likelihood to increase or decrease future dividends, and weights each factor based on its effectiveness in predicting dividend changes to produce a company’s DIVCON Score. After a DIVCON Score is calculated for each company, it is assigned a rating from 1 to 5 according to the DIVCON Rating system:
DIVCON 1, DIVCON 2, DIVCON 3, DIVCON 4 and DIVCON 5. Companies in the DIVCON 1 category are those determined most likely to decrease their dividend in the next twelve months. Companies in the DIVCON 5 category are those determined most likely to increase their dividend in the next twelve months. All DIVCON 5 stocks or the 30 stocks with the highest DIVCON Scores, whichever is greater, are selected for inclusion in the Benchmark Index. Companies are weighted in the index based on their DIVCON Scores, with higher DIVCON Scores weighted more heavily.

The Benchmark Index is reconstituted annually on the first Friday in December. As of December 4, 2015, the market capitalizations of the 500 largest U.S. companies included in the DIVCON Scoring System ranged from $7.14 billion to $660.12 billion.


Index Top Holdings (12/31/2015):

McKesson Corp 3.11%
Broadcom Corp 3.07%
Waste Management 3.02%
Estee Lauder Companies 3.00%
Tyson Foods 2.98%
Starbucks 2.98%
Stryker 2.95%
Valero Energy 2.95%
Equifax 2.94%
Tiffany 2.94%


Index Sector Breakdown (12/31/2015):

Consumer Discretionary 28.48%
Industrials  28.05%
Consumer Staples  11.59%
Information Technology  11.43%
Healthcare  8.86%
Financials  5.57%
Energy  2.95%
Materials  2.76%


Useful Links:
LEAD Home Page



Category: Equities> Regions> USA> US Income> US Dividends



ETFtrack comment:
Here is a comment from Eric Ervin, CEO of Reality Shares:
“Companies that increase their dividends have historically outperformed those with flat or declining dividends, or no dividend at all. Our DIVCON ETFs are designed to provide differentiated returns by investing only in the select group of companies whose fundamental corporate strength have earned them the highest DIVCON dividend health scores and our highest expectations for dividend growth.”

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