The WBI Power Factor High Dividend ETF (WBIY) more than doubled its assets under management during the third quarter, exceeding $125 million on September 14, 2018. WBI Investments, Inc., a leading provider of wealth-building strategies targeting an optimal blend of bear market protection and bull market return, introduced the multi-factor Smart Beta ETF in December 2016 and passed the $50 million asset milestone in June of this year.
WBIY is the #1 top dividend equity ETF out of 59 dividend-yielding, U.S. equity funds based on 1-year return as of August 31, 2018 according to Morningstar and was recently listed as one of five dividend ETFs worth buying by Zacks Research.
Were seeing volatility return to markets and investors are starting to get uneasy, said Don Schreiber, Jr., founder and CEO of WBI. For some, dividend-paying funds like WBIY are a great way to get defensive because investors get a source of return that is not dependent on whether the markets go up or down. WBIY does this well by focusing on high-yielding U.S. domestic stocks with high-quality fundamentals.
As of August 31, 2018, WBIY 1-year total returns 27.67% (market price) and 26.11% (net asset value) outperformed the S&P 500 total return 19.66% and 99% of the 1,273 ETFs and mutual funds in the Morningstar Large Value category. WBIY boasts a 30-Day SEC yield of 4.45% (subsidized) and a dividend yield of 5.43% — nearly double the category average of 2.72%. The fund has deep underlying liquidity with a net expense ratio of 0.70%. The funds holdings are reconstituted quarterly, and is typically heavily allocated to sectors not commonly found in other high dividend ETFs, such as consumer discretionary. For standardized performance and 30-day SEC yields, see the fact sheet.
WBIY is a thoughtfully constructed, cost-efficient ETF that is specially tailored for investors seeking more consistent capital growth with lower volatility and less risk. Designed to track the Solactive Power Factor High Dividend Index, selection is driven by WBIs proprietary Power Factor model, which identifies the top 50 stocks with the highest yield and strongest fundamentals out of the 3,000 stocks in the Solactive all-cap U.S. equity universe. As with all WBI ETFs, WBIY is structured to capture return while reducing the potential for incurring large bear market losses. The fund has an upside capture ratio of 114.70 and a downside capture ratio of 78.52 vs. the S&P 500 for the 1-year period as of 8/31/18.
Outside of the tech trade, stock performance has been sluggish, said Matt Schreiber, WBI President and Chief Investment Strategist. For investors looking to participate in the market but are weary of all-time market highs and the potential for a bear market, dividend-focused products tend to have a consistent and reliable income stream. There are value stocks out there, you just have to know where to look and WBIY has a great process to do that.
Don Schreiber, Jr. has been a strong proponent of dividends for decades and is the co-author of All About Dividend Investing, published by McGraw-Hill in 2004.
The performance data quoted represents past performance and is not a guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For most recent month-end performance, please visit wbishares.com.
For over three decades, WBIs goal has been to help investors stay comfortably invested by aiming to reduce risk to capital. Our value-driven investment process and risk-managed SMA and ETF strategies can help investors navigate both bull and bear markets.
An investment in the Fund is subject to investment risk, including the possible loss of principal amount invested. Common stocks are susceptible to general stock market fluctuations and to volatile increases and decreases in value as market confidence in and perceptions of their issuers change. High yielding stocks are often speculative, high risk investments. These companies can be paying out more than they can support and may reduce their dividends or stop paying dividends at any time, which could have a material adverse effect on the stock price of these companies and the Funds performance. The Fund is not actively managed and the Sub-Advisor does not attempt to take defensive positions in declining markets. Unlike many investment companies, the Fund does not utilize an investing strategy that seeks returns in excess of its Underlying Index. There is no guarantee that the Fund will achieve a high degree of correlation to the Underlying Index and therefore achieve its investment objective. Market disruptions and regulatory restrictions could have an adverse effect on the Funds ability to adjust its exposure to the required levels in order to track the Underlying Index. Other Fund risks include but are not limited to concentration risk, cyber security risk, small and mid-cap risk, tracking error risk, premium/discount risk, and valuation risk. Additional details regarding the risks of the Fund can be found in the prospectus.
Shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Owners of the shares may acquire those shares from the Fund and tender those shares for redemption to the Fund in creation units only. Market returns are based upon the midpoint of the bid-ask spread at 4:00pm EST (when NAV is normally determined for most ETFs). Market price returns do not represent the returns you would receive if you traded shares at other times. SEC Yield reflects the dividends and interest earned during the most recent 30-day period covered by the Funds filings with the SEC, after the deduction of the Fund’s expenses. The unsubsidized yield reflects the 30-day yield if the investment adviser were not waiving all or part of its fee or reimbursing the fund for part of its expenses.
THIS INFORMATION MUST BE PRECEDED OR ACCOMPANIED BY A PROSPECTUS. To view the prospectus, click on the link at www.wbishares.com/resources. Before investing you should carefully consider the Fund’s investment objectives, risks, charges, and expenses. Please read the prospectus carefully before you invest.
The funds net fee is 0.70% and gross fee is 1.37%. The Sub-Advisor has contractually agreed to waive or reduce its fees and to assume other expenses of the Fund, if necessary, in an amount that limits Total Annual Fund Operating Expenses and organizational costs to no more than 0.70% of the Funds average daily net assets until at least October 31, 2018.
Up and Down Capture Ratios: used to evaluate how well a manager performed relative to an index during periods when the index is up or down.
The Dividend Yield (projected) is the projected percentage of a companys stock price to be paid out as dividends, calculated by estimated dividends per share (DPS) divided by the companys month-end stock price. Morningstar calculates estimated DPS based on the most recently reported DPS and average historical dividend growth rates.
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