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Strategy Shares launches Target Distribution ETF

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ETF provider Strategy Shares has launched the Strategy Shares Nasdaq 7HANDL Index ETF (HNDL), designed to generate results that correlate generally to the performance of an index within a new indexing category called Target Distribution Indexes.

The ETF is designed to support a 7.0 per cent annual distribution rate, all or a portion of which may include a return of capital.

HNDL’s investment strategy seeks results that correlate generally to the performance of the Nasdaq 7HANDL Index, which was developed by Bryant Avenue Ventures in partnership with Nasdaq and Dorsey Wright.

The Nasdaq 7HANDL Index consists of a well-diversified, multi-asset portfolio of low-cost ETFs and employs modest leverage in an amount equal to 23 per cent of the total portfolio. The Index seeks to offer the potential for high monthly distributions while maintaining a stable net asset value over time.

“Strategy Share’s mission is rooted in bringing alternative-focused ETFs to the market, and this latest fund addition renews this focus,” says Jerry Szilagyi, CEO of Strategy Shares. “The Strategy Shares Nasdaq 7HANDL™ Index ETF seeks to offer a steady 7 per cent distribution, and is the first fund of its kind representing a new category of indexes. HNDL is the only fund providing access to the Nasdaq 7HANDL Index, which is unique in its offering of a targeted steady distribution, diversified risk and liquidity.” Investors should not assume that the source of distribution from the Fund is net profit.

The Index’s goal is to represent a balanced portfolio of US equities, bonds and alternatives, via investments in low-cost ETFs. These ETFs are split into two categories: a Core Portfolio and a Dorsey Wright Explore Portfolio. The Core Portfolio consists of a 70 per cent allocation to US aggregate fixed income ETFs and a 30 per cent allocation to US large cap equity ETFs.

The Dorsey Wright Explore Portfolio consists of a tactical allocation to ETFs in various US asset categories that have historically provided high levels of income, based on a proprietary methodology developed by Nasdaq Dorsey Wright Investment Research & Analysis that seeks to incorporate momentum, yield and risk. 
 
“Financial innovation continues with our partnership on the Nasdaq HANDLs indexes,” says Dave Gedeon, Vice President and Head of Research & Development at Nasdaq Global Indexes. “The goal of this 7HANDL Index is to deliver consistent income that investors in all walks of life seek. We are thrilled to continue the evolution of income strategies and believe this will open new avenues in the creation of fixed-income alternatives.”

HNDL has adopted a policy to pay monthly distributions on Fund shares at a target rate that represents an annualised payout of approximately 7.0 per cent on the Fund’s per-share net asset value on the date of a distribution’s declaration. All or a portion of a distribution may consist of a return of capital.

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