KraneShares has announced the launch of its latest ETF, the KraneShares S&P Pan Asia Dividend Aristrocrats ETF ((KDIV )), on the NYSE today.
The fund will track the S&P Pan Asia Dividend Aristocrats Index, which offers exposure to a range of Pan Asian countries from Australia to China, Japan, and more, one of the fastest-growing regions globally. KDIV tracks companies that have grown their dividends sustainably over an extended time horizon; such companies have been shown to outperform their broader indexes on a risk-adjusted basis over the long term.
“KDIV is a timely expansion of KraneShares’ China and global ETF suite, which includes the $6.7 bn KraneShares CSI China Internet ETF (KWEB ). KDIV is also the first US-listed ETF to apply the S&P Dividend Aristocrats methodology to the Pan Asia region,” Jonathan Krane, CEO of KraneShares, said in the press release.
The fund comes at time when dividends are an attractive strategy for many advisors and investors as inflation soars in the U.S. and globally and equities feel the pressure.
“As markets remain volatile in 2022, we believe dividend growers could continue to outperform the broader market. Adding dividend growers to an investment portfolio may result in lower volatility, compounded growth on dividend reinvestment, and reduced drawdown in declining markets,” said Brendan Ahern, CIO of KraneShares, in the press release.
KDIV will provide advisors with the opportunity to diversify their portfolios globally while still taking a more defensive stance against market volatility through dividend aristocrat companies. It’s particularly appealing at a time when many central banks in Western countries are fiscally tightening while their Eastern counterparts are either easing or have remained more monetarily accommodative. Asia dividend aristocrats have averaged higher yields over the last 12 years (between 2009 and 2021) than the S&P Pan Asia Broad Market Index.
“ETF-focused advisors have leveraged index-based dividend aristocrats for more than a decade in seeking out U.S. equity exposure, which makes this new fund focused on Asia appealing. Companies with long records of raising dividends tend to hold up better during periods of market volatility, while still able to participate in the upside,” explained Todd Rosenbluth, head of research at VettaFi.
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