Amplify Investments, begun trading a new US Dividend ETF of ETFs, the Amplify YieldShares Prime 5 Dividend ETF (Bats: PFV) on Wednesday, September 21, 2016. Here is a synopsis of the new ETF:
|Symbol: PFV||Exchange: BATS|
|Name: Amplify YieldShares Prime 5 Dividend ETF||Net Expense Ratio: 0.49%|
The Amplify YieldShares Prime 5 Dividend ETF seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Prime 5 US Dividend ETF Index.
The Prime 5 US Dividend ETF Index seeks to provide targeted exposure to the 5 highest-ranked dividend ETFs (Prime 5) based on the Prime Scoring and Selection Criteria (as discussed below). The Fund believes that the Prime 5 offers the potential for increased income, diversification and reduced share price volatility.
The Selection Universe: The selection universe for the Index includes ETFs that track diversified equity indices comprised of companies incorporated in the United States or its territories that trade on BATS, the NYSE or The NASDAQ. As of the date of this prospectus, the selection universe constituted approximately 59 ETFs. Each constituent of the Index must meet certain minimum liquidity and distribution standards. Specifically, Index constituents must:
(i) exhibit 3-month average daily trading volume of at least $5 million;
(ii) have assets under management of at least $250 million; and
(iii) make distributions on a monthly or quarterly basis.
The selection universe excludes exchange-traded notes, sector-based ETFs and ETFs that hold call options, leveraged and/or inverse ETFs, and ETFs whose portfolio, in the aggregate, consists of more than 10% exposure to the following asset types: real estate investment trusts; business development companies; and master limited partnerships.
Prime Scoring and Selection Criteria:
The Index Provider selects the Prime 5 according to the following steps:
1. Begin with the selection universe for the Index.
2. Rank each Index constituent according to the following three factors:
(i) Indicated Dividend Yield, in ascending order;
(ii) Realized Volatility of the last 60 trading days, in descending order; and
(iii) Total Expense Ratio, in descending order.
“Indicated Dividend Yield” is calculated by dividing the sum of the fund’s trailing 12-month distributions paid by the NAV at the time of calculation; “Realized Volatility” is the magnitude of daily price movements, regardless of direction, over a specific period; and “Total Expense Ratio” is defined as the total annual fund operating expenses, net any waivers, expressed as a percentage of the assets under management, as publicly disclosed by the fund.
3. Multiply the individual rankings for each Index constituent by a corresponding factor representing the level of importance assigned to
each ranking component. Indicated Dividend Yield is assigned a 50 percent weight; Realized Volatility of the last 60 trading days is assigned a 33.33% weight; Total Expense Ratio is assigned a 16.67% weight.
4. Sum the three factor-weighted ranks to compute a final score for each Index constituent. If two or more Index constituents receive the same final score, the Index Provider
refers to higher Indicated Dividend Yield to rank such constituents.
5. Select the five highest-ranked constituents; the Index consists of the Prime 5.
If, at any quarterly rebalancing date of the Index, the Fund determines that, pursuant to the Investment Company Act of 1940, as amended, and any rules, regulations or interpretations thereunder, a participation agreement is required in order for the Fund to own an Index constituent, and the Fund is unable to procure such participation agreement, then the Index Provider will, at the quarterly rebalancing date, exclude the constituent. The Index Provider will then select the next eligible Index constituent.
The final scores for each of the Prime 5 are summed and each respective constituent’s score is divided by the summed total to determine its respective weighting in the Index. No individual constituent of the Index may exceed a 30% weighting of the Index at the time the Index is rebalanced. The Index is rebalanced quarterly, but may be adjusted more frequently for specific corporate events.
Fund Top Holdings (09/21/16):
|ISHARES TR CORE HIGH DV ETF||HDV||21.25%|
|SCHWAB STRATEGIC TR US DIVIDEND EQ||SCHD||20.41%|
|VANGUARD WHITEHALL FDS INC HIGH DIV YLD||VYM||19.91%|
|SCHWAB STRATEGIC TR US LCAP VA ETF||SCHV||19.88%|
|WISDOMTREE HIGH YIELDING EQ||DHS||18.54%|
PFV Home Page
Category: Equities> Regions> USA> US Income> US Dividends
Here is a comment from Christian Magoon, CEO of Amplify Investments:
“With over 130 dividend ETFs in the marketplace, it is becoming increasingly difficult for investors to navigate the dividend ETF landscape. PFV is designed to make dividend investing easy.”