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ETFlab launches ETF dividend strategy


ETFlab Investment, the Munich specialist for exchange-traded funds, has launched a dividend concept with ETFs for the German equity market.

ETFlab Investment, the Munich specialist for exchange-traded funds, has launched a dividend concept with ETFs for the German equity market.

ETFlab DAXplus Maximum Dividend enables investors to put their money on the strategy index of Deutsche Börse of the same name, via an ETF, for the first time.

‘This dividend index is looking ahead, not back, and therefore fits us and our investors well,’ says Andreas Fehrenbach, managing director of ETFlab Investment.

Whereas normally dividend strategies orientate themselves by dividend returns of the past, as regards their weighting, the most important criterion for admitting a stock corporation into the DAXplus Maximum Dividend Index is that a dividend is paid within the next index period, i.e. regularly twice a year.

‘Here, effective dividend announcements of the companies and dividend estimates are relied upon,’ Fehrenbach says.

Selection of the respective shares is based on the broad HDAX, which comprises the 110 biggest values of the Prime Standard of Deutsche Börse. The companies must also fulfil certain minimum criteria concerning market capitalization and liquidity of equity trading.

Weighting is performed according to the dividend return, which is calculated on the basis of the actual share value at the moment of index adjustment and the predicted dividend. The index invests in the 20 German equities with the highest dividend return.

Fehrenbach says this dividend return is two and a half times higher than the German Dax index.

The ETF distributes the dividends to the investors up to four times a year as regular earnings, and is therefore suited for investors relying on a continuous influx of capital.

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