ProShares, the largest issuer of inverse and leveraged exchange traded funds, on Thursday continued expanding its lineup of plain vanilla ETFs with addition of its fifth dividend growth ETF, the ProShares MSCI Europe Dividend Growers ETF (NYSE: EUDV).
The new ETF follows the MSCI Europe Dividend Masters Index, which focuses on companies that are currently members of MSCI Europe and have increased dividend payments each year for at least 10 consecutive years. The index contains a minimum of 25 stocks, which are equally weighted. No single sector may compose more than 30% of the index and no single country may compose more than 50% of the index. If there are fewer than 25 stocks with at least 10 consecutive years of dividend growth, or if sector or country caps are breached, the index will include companies with shorter dividend growth histories, according to a statement issued by ProShares.
As of August 31, there were 51 companies with an average market value of almost $38 billion in the index, according to ProShares data. On that date, the index had a dividend yield of almost 3.1 percent with a price-to-earnings ratio of 16.38 and a price-to-book ratio of 2.9.
The ProShares MSCI Europe Dividend Growers ETF features exposure to 10 European nations, four of which are not members of the Eurozone. When combining the new ETF's weights to the UK, Switzerland, Denmark and Norway, EUDV allocates about 68.5 percent of its geographic weight to countries that are not Eurozone member states. Alone, the UK is about 49.5 percent of EUDV's geographic weight.
In the second quarter, European dividend growth was 8.6%, an impressive result for the region with Italy, the Netherlands and Belgium enjoying the strongest underlying growth. The region's financials significantly increased their payouts, according to Henderson Global Investors.
Financial services stocks are just under six percent of EUDV's weight while the Netherlands and Belgium combine for 5.7 percent of the new ETF's geographic weight. EUDV does not hold any Italian stocks.
In the UK, consumer staples and health care stocks are expected to be among that region's top dividend growers this year. Last year, the UK sported the best dividend growth rate among ex-U.S. developed markets. Healthcare and consumer staples stocks combine for 35 percent of EUDV's weight.
The UK, France and Germany are among several developed markets where the dividend yield on the country's major equity index exceeds the yield on benchmark government bonds. British, French and German stocks combine for about two-thirds of EUDV's weight. The new ETF charges 0.55 percent per year, or $55 per $10,000 invested.
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