First Trust, ProShares Debut Income-Focused ETFs (FDIV, EFAD)

by on August 21, 2014 | ETFs Mentioned:

Two new ETFs have hit the market over the last week, as the industry proves that investors are still focused on income at a time with record-low interest rates. First Trust and ProShares each rolled out products that focus on providing an income stream for investors, each with a unique strategy. We take a closer look at the two new funds below [for more ETF news and anlaysis subscribe to the free ETF Daily Roundup].

First Trust Rolls Out Diversified Fund

Late last week, First Trust launched the Strategic Income ETF (FDIV) which aims to be something of a one-stop-shop for income. The fund is actively managed and holds stocks and ETFs from varying asset classes; its current makeup includes equity, currency, and bond exposure. The fund will attempt to provide investors with a healthy income stream while remaining diversified as it invests in securities from all around the world.

dsgFDIV charges 87 basis points for investment.

ProShares Offers EAFE Dividends

The MSCI EAFE Dividend Growers ETF (EFAD) from ProShares will begin trading this morning and will look to offer international dividend exposure. The fund selects a minimum of 40 companies from the MSCI EAFE Index that have increased their dividends for at least 10 consecutive years and equal weights the holdings from there.

According to the SEC filing, no single sector can make up more than 30% of the index and no single country can account for 50% of exposure. In the case that there are not at least 40 companies with 10 consecutive annual dividend increases, the fund’s index will include some with shorter dividend growth histories.

EFAD charges 50 basis points for investment.

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Disclosure: No positions at time of writing.