Prime Indexes, an index creator focused on emerging trends in the exchange-traded fund (ETF) industry, has launched the Prime 5 US Dividend ETF index (PFIVE) and licensed it to Amplify ETFs for the creation of a new income-oriented ETF.
The fund was listed on BATS Global Markets on 21 September.
PFIVE is a rules-based index seeking to provide targeted exposure to the five highest-ranked ETFs with demonstrated dividend growth.
The ranking is based on Prime Indexes’ proprietary Prime Score methodology and includes the following three factors: high dividend income, low share price volatility and low expenses. The index is rebalanced and reconstituted on a quarterly basis.
Prime Indexes was launched by ETF industry veterans Kris Monaco and Chris Yeagley, who recognised the growing trend of product proliferation within the space.
“ETFs have changed the investment landscape forever, but there are now thousands to choose from, and investors can be overwhelmed by the number of competing and complex products,” says Yeagley, who with Monaco is managing partner of Level ETF Ventures. “Investors need intuitive principles for identifying, evaluating and comparing ETFs, and we believe that a common sense approach to doing so is encompassed in our Prime Score methodology.”
The launch of PFIVE comes at a time when investors are seeking income in the form of dividends given the depressed state of interest rates.
“Investors continue to seek access to income-focused investment strategies due to record low interest rates and a surge in retiring Baby Boomers,” says Christian Magoon, CEO of Amplify ETFs.
“Income-oriented investors need a tool that helps them navigate the growing population of dividend-generating ETFs, and PFIVE does just that,” adds Monaco. “We are proud and excited to be partnering with Amplify ETFs in the launch of its fund based on our index, which provides a new approach to investing in dividend ETFs.”