Russell Investments High Dividend Australian Shares ETF (RDV)
|Time for Dividend Stocks to Shine?|
About this Fund
|FUND MANAGER||Russell Investment Management|
|ASSET CLASS||EXCHANGE TRADED FUNDS|
|INVESTMENT STYLE||RDV invests in a portfolio of Australian blue-chip companies with a bias towards those that have a high expected dividend.|
|INVESTMENT PROFILE||The Fund seeks to match the performance of its Benchmark Index before fees and other costs.|
|BENCHMARK||Russell Australia High Dividend Index|
|FUND SIZE||Russell Australia High Dividend Index|
|NO. OF HOLDINGS||Around 50|
Benefits of investing in the Russell Investments High Dividend Australian Shares ETF
What are the benefits of ETFs in general?
What are the benefits specific to the Fund?
About the Fund
The Russell Investments High Dividend Australian Shares ETF (the 'Fund') seeks to track the Russell Australia High Dividend Index ('the Index'), which comprises Australian blue-chip companies with a bias towards those that have a high expected dividend yield but also meet other characteristics including: a history of paying dividends; dividend growth and consistent earnings. The Fund invests in a diversified portfolio of Australian shares and trusts listed on the Australian Securities Exchange (ASX), with the aim of delivering income, through higher dividends and franking credits, as well as capital growth to investors.
About the Index
The Russell Australia High Dividend Index is an equity index provided by the Frank Russell Company (Index Provider). It is designed to provide investors with exposure to above average dividends, including franking credits through a diversified exposure to blue chip Australian companies. The Index includes large cap companies and is built using an objective, transparent and market-driven construction.
The Russell Australia High Dividend Index starts with the members of the Russell Australia Large Cap Index (a sub-index of the Russell Global Index). Also included in the Russell Australia High Dividend Index are Australian infrastructure stocks. Since the Russell Australia High Dividend Index is constructed for domestic use, foreign ownership limits are excluded.
How we invest your money
The Fund seeks to track the performance of the Russell Australia High Dividend Index by investing predominantly in Australian shares and trusts listed on the ASX. The Russell Australia High Dividend Index is weighted to companies that are expected to make high dividend payments. Derivatives may also be used to a limited extent to obtain or reduce exposure to such securities.
We will not significantly change the Fund's investment strategy as described in the PDS unless the change has been approved by a resolution of Unitholders passed by at least 75% of votes cast on the resolution (referred to as a 'special resolution').
The Russell Australia High Dividend Index construction methodology targets high dividends, and is also designed to identify better quality dividends. To capture the quality of the underlying dividends the methodology focuses on penalising those companies that pay sporadic dividends and also those companies whose dividends have been falling or are likely to fall in the future. Multiple factors at varying weights are used to capture the relative importance of high forecasted dividends, consistency of dividends and the trajectory of dividend growth (both future and historical).
The factors used in the model are not equally weighted; rather they are weighted by their relative importance with the greatest emphasis on future dividends and equal emphasis on historical yields, dividend growth (including trailing and forecasted growth) and EPS variability.
The universe of stocks is then refined for the Russell Australia High Dividend Index to include the top 50 Australian companies by stock weight, determined by reference to market capitalisation and the specific weighted quantitative and qualitative dividend characteristics described above.
The Russell Australia High Dividend Index is reconstituted semi-annually at the end of February and August.
RIM will not substitute the Russell Australia High Dividend Index for another index if to do so would significantly change the Fund's investment strategy as described in this PDS, unless the change of investment strategy has been approved by a resolution of Unitholders passed by at least 75% of votes cast on the resolution (referred to as a 'special resolution').
More details about the characteristics of the Russell Australia High Dividend Index are available at russellinvestments.com.au/etfs.
The Fund may use derivatives to equitise cash holdings in order to achieve a desired investment position without buying or selling the underlying asset. Futures usage will generally be limited to a maximum of 5% of the Fund's value at any time. Derivatives will not be used speculatively or to leverage the Fund.