BlackRock expanded its equity income exchange traded fund (ETF) range with two funds, offering investors access to companies that generate consistent dividends.
The two iShares funds provide exposure to companies that exhibit strong income generation potential, relative to the broader market. The underlying indices of the funds screen to include only companies that have a 30 per cent higher dividend yield than the parent universe. Securities are then screened according to their earnings quality and to ensure that the dividends they pay are both sustainable and persistent over time.
The two new funds complement the existing iShares MSCI USA Quality Dividend Ucits ETF (QDIV), and brings the range of iShares Dividend ETFs to 14, the largest available to European investors. Through these funds, investors can express a global view as well as tilt their income portfolios to the desired regional exposures.
Manuela Sperandeo, head of iShares specialist sales for EMEA at BlackRock, commented: “Despite a return to monetary policy normalisation in the US, rates look set to remain low compared to historic levels both in the US and Europe. In this environment, it can make sense to look for investments that aim to provide a steady stream of income.
“Our range of Quality Dividend ETFs provide investors with access to financially robust companies with high and sustainable dividends. These funds provide investors with access to long-standing active management insights within an index investing framework, while their low expense ratios and diversification traits make them an attractive proposition for the backbone of an equity portfolio.”
The funds are physically-replicating, meaning the funds hold the underlying securities of the index. The funds carry a total expense ratio of 0.28% for the European exposure and 0.38% for the World exposure.