SAN DIEGO, Jan. 14, 2016 /PRNewswire/ -- Reality Shares, Inc., a provider of differentiated strategies for exchange-traded fund (ETF) investors, today launched two alternative dividend growth Funds, the Reality Shares DIVCON Dividend Defender ETF (BATS: DFND) and the Reality Shares DIVCON Dividend Guard ETF (BATS: GARD), the latest new ETFs to use the company's innovative DIVCONTM system. DIVCON is a proprietary dividend health rating methodology which systematically ranks companies' future dividend growth prospects based on a weighted average of seven quality factors correlated to dividend growth. Both ETFs were listed today on the BATS Exchange.
Both the DIVCON Dividend Defender ETF and DIVCON Dividend Guard ETF seek to mitigate risk by combining long stock positions in the large-cap companies with the highest probability of increasing their dividends with short stock positions in large-cap companies with the highest probability of cutting their dividends, as measured by their DIVCON dividend health scores. The GARD ETF additionally features dynamic market exposure based on Reality Shares' Guard IndicatorTM, a proprietary quantitative gauge of market strength. Like the Reality Shares DIVCON Leaders Dividend ETF (BATS: LEAD) launched earlier this month, both new index ETFs feature rules-based stock selection and weighting based on DIVCON scores.
"We believe dividend health is an effective gauge of companies' longer-term prospects, and our research supports our conviction that dividend-growing companies have historically outperformed the market while dividend cutters have produced negative returns," said Eric Ervin, CEO of Reality Shares. "Based on that principle, the DIVCON Dividend Defender and DIVCON Dividend Guard ETFs offer investors who are seeking to mitigate risk with hedged strategies that invest in the companies our DIVCON methodology indicates are most likely to grow their dividends while shorting the ones most likely to cut."
The Reality Shares DIVCON Dividend Defender ETF (BATS: DFND) seeks to provide returns through the use of a hedged (long/short) equity portfolio. The Fund invests 75% of its portfolio market value in the large-cap U.S. companies with the highest probability of increasing their dividends within a year, based on their DIVCON dividend health scores. The remaining 25% of the portfolio market value is used to short the large-cap U.S. companies with the highest probability of cutting their dividends within a year. The expense ratio for DFND is 0.95%.
The Reality Shares DIVCON Dividend Guard ETF (BATS: GARD) seeks to reduce the impact of declining markets on Fund performance by dynamically adjusting its market exposure based on the strength of the market as determined by Reality Shares' Guard Indicator, a quantitative tool that gauges market strength by comparing technical trends in market price and volatility to historical averages. When the Guard Indicator signals a strong market, the Fund invests 100% of its portfolio in the large-cap U.S. companies with the highest probability of increasing their dividends within a year, based on their DIVCON dividend health scores. When the Guard Indicator signals a weak market, that long stock weight is reduced to 50%, and the remaining 50% of the portfolio is allocated to a short stock position in the large-cap U.S. companies with the highest probability of cutting their dividends within a year. The expense ratio for GARD is 1.05% with a net expense ratio of 0.95%**.
Each of the DIVCON Funds seeks to provide long-term capital appreciation by tracking the performance, before fees and expenses, of its underlying benchmark index.
For more information and a copy of the Funds' prospectuses, please visit: http://www.realityshares.com/funds or call (855) 595-0240.
* Source: Compustat & Reality Shares Research, analysis of S&P 500 companies from April 30, 1999 to Oct. 31, 2015.
**Net fund expenses for GARD reflect a Contractual Fee Waiver through February 28, 2017.
About Reality Shares
Reality Shares is an innovative asset management firm, ETF issuer and index provider that offers institutional strategies for ETF investors. Honored as "New ETF Issuer of the Year" by ETF.com, the firm's research-driven investment products and solutions are designed to minimize the effects of market noise and emotion on investment performance. Reality Shares' goal is to democratize the world's best investing ideas, using systematic quantitative methods to deliver products and solutions that support a wide range of investing objectives, such as diversification, lower correlation, risk mitigation, or unique market exposures.
For more information, visit www.realityshares.com or follow us on Twitter @RealityShares.
This material is prepared by Reality Shares, Inc. ("Reality Shares") and is presented for information purposes only. This material does not constitute investment advice and should not be considered a solicitation to buy or an offer to sell securities. It does not take into account any investor's particular investment objectives, strategies, tax status or investment time horizon.
As with all investments, the value of your investment in the Fund can be expected to go up or down. You can lose money on your investment, including the possible loss of the entire principal amount of your investment. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The principal risk factors affecting your investments in the Fund are set forth below. Each of these factors could cause the value of an investment in the Fund to decline over short- or long-term periods. Additional principal risks include Equity Risk, ETF Trading Risk, Index Performance Risk, Index Tracking Error Risk, Market Risk, Investments in Other ETFs Risk and Non-Diversification Risk, which are more fully defined in the Fund's prospectus.
The ETF shares are bought and sold at market price, may trade at prices above or below the net asset value of the fund, and are not individually redeemed from the fund. Brokerage commissions and expenses will reduce investment returns.
The Reality Shares DIVCON ETFs are new with limited operating history. There is no guarantee the Funds will achieve its investment objective, and may not be suitable for all investors. The Advisor has not previously managed an ETF registered under the 1940 Act.
Before investing you should carefully consider the Fund's investment objectives, risks, charges and expenses. This information is in the prospectus, and may be obtained by visiting www.realityshares.com/funds or by calling 855-595-0240. Please read the prospectus carefully before you invest.
Eric Ervin is a Registered Representative of ALPS Distributors, Inc. Reality Shares Advisors, LLC is the Investment Advisor. ALPS Distributors, Inc. is the Distributor for the Fund. Reality Shares Advisors, LLC and ALPS Distributors, Inc. are not affiliated.
Copyright© 2015 Reality Shares, Inc. All rights reserved.
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