Franklin Templeton has launched two dividend multiplier ETFs that seek to deliver strong growth potential and attractive dividend income.
The Franklin U.S. Dividend Multiplier Index ETF (XUDV) and the Franklin International Dividend Multiplier Index ETF (XIDV) are designed to provide enhanced, or multiplied, dividend income. The ETFs’ underlying indexes achieve superior risk-adjusted dividend income compared to other indexes relying on individual stock screening.
The new dividend multiplier ETFs were developed in collaboration with New Frontier and VettaFi. XUDV and XIDV are underpinned by New Frontier’s proprietary optimization techniques, which make use of commercial risk models and dividend forecasts.
“XUDV and XIDV demonstrate Franklin Templeton’s commitment to expanding our suite of portfolio solutions in order to meet the evolving needs of our clients,” Todd Mathias, Head of U.S. ETF Product Strategy at Franklin Templeton, said in a statement.
The two dividend multiplier ETFs may serve as a compelling option for investors seeking access to long-only equity income. These strategies are particularly well-suited for fee-based advisors, sophisticated clients, and retail investors seeking efficient, diversified equity solutions, Mathias said.
XUDV and XIDV, listed on NYSE Arca on January 23, charge 9 basis points and 19 basis points, respectively. XUDV tracks the VettaFi New Frontier U.S. Dividend Select Index and XIDV provides exposure to the VettaFi New Frontier International Dividend Select Index.
XUDV’s underlying index was yielding 4.1% as of January 21, while XIDV’s underlying index was yielding 7.5%.
Under the Hood of Franklin Templeton's New Dividend Multiplier ETFs
The integration of advanced optimization techniques in XUDV and XIDV may help investors achieve more robust, reliable outcomes.
“Our collaboration with Franklin Templeton and VettaFi on XIDV and XUDV marks a new era in both dividend investing and ETF innovation,” said Robert Michaud, CIO at New Frontier. “By applying our proven optimization and quantitative methods to dividend strategies, we’ve built an index for a more robust and reliable income stream, coupled with risk-managed capital appreciation.”
Dividend ETFs typically focus on either market diversification or higher yields. XUDV and XIDV are unique in that their underlying indexes are designed to offer attractive growth potential through diversified market exposure as well as generous dividend income.
“This launch isn’t just about new products. It’s about setting a new standard in the ETF industry through effective investment technology,” Michaud said. “We’re confident these ETFs will redefine expectations for dividend-focused investments and demonstrate the power of advanced optimization in portfolio construction.”
The indexes underpinning XUDV and XIDV take a holistic approach to maximize dividend exposure while effectively managing risk. The indexes optimize the entire portfolio simultaneously, considering the interplay of all stocks and risk/reward characteristics.
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Vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for XUDV and XIDV, for which it receives an index licensing fee. However, XUDV and XIDV are not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of XUDV and XIDV.
