A smart beta index from FTSE Russell and Research Affiliates will meet the “unmet” investor need of identifying which companies are high quality, high dividend payers, its creators say.
The FTSE RAFI Equity Income Index Series will track high dividend-paying stocks, screened to target sustainable income. Rather than using market capitalisation, the indices are weighted using fundamental measures.
Jason Hsu, co-founder and vice chairman, Research Affiliates, says: “For a good number of investors, accessing sustainable, high income remains an unmet need. Yields in fixed income remain historically low, while within the equity space, existing high dividend strategies tend to tilt toward low growth sectors or poor quality stocks.”
FTSE and Research Affiliates have collaborated on alternatively weighted indices for ten years.
As of March 31, 2015, investable products linked to indexes developed by FTSE Russell and Research Affiliates have approximately $75 billion (€68.2 billion) of assets under management.
©2015 funds europe
