FTSE Russell has teamed up with Research Affiliates to launch a smart beta index series tracking quality high dividend paying stocks.
The FTSE RAFI Equity Income Index Series is a collection of indices that are weighted according to fundamental measures rather than by market capitalisation.
ETF issuer Source helped develop the indices in response to demand for a dividend-focused strategy, and will be the first ETF provider to launch a range of ETFs linked to the benchmarks later this year.
FTSE Russell and Research Affiliates have been in partnership since 2005, and products linked to indices developed by the pair now have approximately $75bn of assets under management.
Jason Hsu, co-founder and vice chairman at 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.
“To address this gap in the market, Research Affiliates and FTSE Russell are introducing these new smart beta indexes, which we built in close collaboration with Source. The FTSE RAFI Equity Income Index Series includes high dividends from companies that have been screened for their ability to sustain their dividends.”
Last week, Invesco PowerShares announced plans to launch a range of smart beta US equity ETFs, based on new indices from FTSE Russell, the Russell Pure Style Index Series.