First Trust has launched the First Trust Europe Rising Dividend Achievers UCITS ETF (“EDVY”) on the London Stock Exchange and Borsa Italiana.
The firm writes that EDVY is an ETF that seeks to provide investors with exposure not only to European large-cap companies with a history of raising their dividends, but that also exhibit the characteristics to potentially do so long into the future.
EDVY targets European large-cap firms that have consistently increased their dividends over the previous three and five-year periods, while also exhibiting strong fundamentals such as earnings stability that may support potential future dividend growth.
The ETF, which is classified as an Article 8 fund under SFDR, seeks to replicate the performance of the Nasdaq Europe Rising Dividend Achievers Index, offering investors the opportunity to invest in a diversified portfolio of high-quality dividend-growing stocks.
“We are thrilled to bring EDVY to European investors, providing them with a timely opportunity to access some of the most resilient European companies with a proven track-record in raising dividends,” says Rupert Haddon, Managing Director at First Trust Global Portfolios.
“We believe dividends are one of the most powerful indicators of business longevity and resilience, offering a rare insight into management’s confidence the business’ long-term growth trajectory. After all, over the last few decades, companies that have consistently grown their dividend have demonstrated a higher risk-adjusted return. First Trust’s rising dividend achievers strategies, which have over USD19 billion in global AUM, aim to capitalise on this potential by focusing on firms with strong fundamentals and a proven commitment to consistently increasing their dividends.”
The firm provides the following list of key features of EDVY
Focus on large cap companies: The stability and proven track record of large-cap entities offer investors the potential for reliable income and greater resilience during market fluctuations.
Comprehensive screening process:
Historical dividend growth – Every company must have paid a dividend in the trailing twelve-month (TTM) period greater than the dividend paid in the TTM period three and five years prior.
Earnings stability – Every company must have positive earnings per share in the TTM period greater than the earnings per share in the TTM period three years prior.
Cash to debt ratio – Every company must have a cash to debt ratio greater than 50 per cent.
Payout ratio – Every company must have a TTM payout ratio less than 65 per cent.
Long-Term Growth Potential: By targeting companies with strong fundamentals, EDVY seeks to provide investors with exposure to companies that may be capable of sustainable dividend growth over the long term.
Transparent and Cost-Efficient: As an ETF, EDVY offers investors a liquid and cost-efficient solution to gain exposure to a resilient portfolio of European dividend-growing stocks.
