Last weekâ??s ETF Talk introduced the concept of smart beta funds. A key reason a person might invest in a smart beta fund would be to use the fundâ??s formula to invest more heavily in quality equities that are underrepresented in a typical market-cap-weighted exchange-traded fund (ETF). One quality indicator in a stock is whether or not it issues a dividend, and there are a number of smart beta funds which focus on dividend-paying stocks, including FlexShares Quality Dividend ETF (QDF).
QDF seeks to replicate the results, before fees and expenses, of an index of high-quality dividend-paying equities. â??High-qualityâ?ť in this case is defined by fundamentals such as profitability, reliable cash flow and management performance. This fund is an income-oriented investment.
QDF has gained 6.40% in 2014, after recovering from market drops in February and August. Last year, the fund gained 33.27%. The yield is currently 2.69%. QDF typically makes an annual distribution.
Read more about this dividend-focused smart beta ETF at Eagle Daily Investor.