Industry Updates

DWS employs quality screen for new divi funds

Scott Longley

DWS has launched three news Xtracker dividends ETFs focusing on dividend income weighted on a defensive quality filter designed to lower volatility.

The Xtrackers Morningstar US Quality Dividend UCITS ETF, Xtrackers Morningstar Global Quality Dividend UCITS ETF and Xtrackers MSCI World High Dividend Yield UCITS ETF have listed on the Deutsche Börse and the London Stock Exchange.

DWS now offers six dividend ETFs providing exposure to global, Eurozone, US and North America indices. The all-in annual fees range from 0.30% t0 0.50%.

The three new funds utilize a quality screen titled towards securities with attractive fundamental as well as sustainably high dividends.

The US fund differs slightly from the others; it screens out stocks with weak fundamental based on return-on-equity, earnings variability and debt-to-equity metrics. The fund also filters out stocks with a negative or extremely high pay-out ratio and stocks that do not have a track record of persistent dividend payments.

The two Xtrackers ETFs tracking Morningstar indices take a different approach, utilising proprietary Morningstar analysis based on the firm's 'Economic Moat' research methodology, which aims to build a picture of the fundamental health of a company inclusive of intangible factors such as brand impact, as well as other factors. The Morningstar quality screening therefore aims to look beyond accounting metrics.

In February the reference benchmark of the db x-trackers Euro Stoxx Select Dividend 30 UCITS ETF (DR) was changed to track a quality index, with the name of the ETF changing to the Xtrackers Euro Stoxx Quality Dividend UCITS ETF.

"We want to provide our clients with a sophisticated range of high quality income-oriented ETFs, said Michael Mohr, director of ETF Product Development at DWS.

"The approach that most of our income-oriented ETFs now take, focusing on quality screening based on fundamentals and dividend sustainability, can bring a number of benefits, including lower metrics for volatility and maximum drawdown thanks to weighting in favour of more defensive stocks."

Featured in this article


No ETFs to show.


No topics to show.


No related articles to show.