Metaurus Advisors Enters the ETF Fray

Markets ETF Trends

Metaurus Advisors, a financial technology and innovation company, has entered the exchange traded fund arena, launching two new U.S. dividend-oriented strategies.

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On Wednesday, Metaurus rolled out the Metaurus Advisors’ US Equity Cumulative Dividends Fund – Series 2027 (NYSEArca: IDIV) and Metaurus Advisors’ US Equity Ex-Dividend Fund – Series 2027 (NYSEArca: XDIV), which have a 0.58% and 0.29% expense ratio, respectively.

The Metaurus Advisors’ US Equity Cumulative Dividends Fund – Series 2027 will try to reflect the performance of the Solactive Dividend Index, which aims to generate dividends of the companies in the S&P 500 Index without exposure to the price movements in the constituent index stocks.

The value of the Solactive Dividend Index and the value of the Dividend Fund’s Shares will be affected by the ordinary cash dividends that have been paid to date and general expectations in the market regarding the future levels of dividends, according to a prospectus sheet. It will try to achieve its target dividend exposure through cash and cash equivalents, along with S&P 500 Dividend Futures Contracts if deemed necessary.

“Investors may benefit from an investment in IDIV since it is not concentrated solely in high-dividend paying stocks, as some other dividend-focused investments may be. Dividends have historically been a good hedge against inflation,” according to Metaurus.

On the other hand, the Metaurus Advisors’ US Equity Ex-Dividend Fund – Series 2027 tries to reflect the performance of the Solactive Ex-Dividend Index, which is designed to track the value of shares in the S&P 500 without exposure to dividends. The ETF will provide long-term growth-oriented investors a way to participate in the growth potential of the companies in the S&P 500 Index at a reduced purchase price.

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“An investment in XDIV may allow investors to purchase equity index ‘beta’ at an implied discount, which is likely to result in long-term returns that could differ materially from that of a direct investment in the same underlying index,” according to Metaurus.

Both funds are crafted with an end date as they will be liquidated in December 2027.

“We believe all investors should have choice,” Richard Sandulli, Co-CEO of Metaurus Advisors LLC, said in a note. “With IDIV and XDIV, investors and their advisors now have precise tools to balance current cash flow potential against their growth and risk tolerance, without sacrificing the diversification potential and low cost of index investing. These new ETFs are tools that can be used as standalone investments for dividend focused investors who don’t want equity price exposure, or for longer-term growth investors who seek potentially higher market returns. They can also be held in various combinations to achieve a proportional balance between cash flow and market exposure.”

For more information on new fund products, visit our new ETFs category.

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