BlackRock has expanded the iShares equity income ETF range with two fund launches on the London Stock Exchange, offering investors access to portfolios of global and European companies that generate consistent dividends.
BlackRock’s range of quality dividend ETFs now cover global, US and European exposures.
The newly launched ETFs are the iShares MSCI World Quality Dividend UCITS ETF (WQDV) and the iShares MSCI Europe Quality Dividend UCITS ETF (EQDV).
The underlying indices of the funds screen to include only companies that have a 30% higher dividend yield than the parent universe. Securities are then screened according to their earnings quality and to ensure that the dividends they pay are both sustainable and persistent over time.
WQDV tracks the MSCI World High Dividend Yield Index which caps issuer weights at 5%. The index is market cap weighted and rebalanced semi-annually in May and November. The fund is physically replicating and has a total expense ratio (TER) of 0.38%.
The fund’s largest country exposures are to the US (49.3%), Switzerland (10.1%) and the UK (9.1%). The largest sector exposures are to traditionally high dividend paying industries including consumer staples (19.8%), healthcare (14.3%) and financials (12.2%).
EQDV tracks the MSCI Europe High Dividend Yield 4% Issuer Capped Index which caps issuer weights at 4%. The fund has a TER of 0.28%.
The UK is the largest country weighting in the fund with a 37.6% exposure, followed by France (14.3%) and Germany (14.0%). The largest sector exposures are to financials (36.4%), consumer discretionary (20.1%) and utilities (13.9%).
The two new funds complement the existing iShares MSCI USA Quality Dividend UCITS ETF (QDIV). Through these funds, investors can express a global view as well as tilt their income portfolios to the desired regional exposures. QDIV has a TER of 0.35%.
Manuela Sperandeo, head of iShares specialist sales for EMEA at BlackRock, commented: “Despite a return to monetary policy normalisation in the US, rates look set to remain low compared to historic levels both in the US and Europe. In this environment, it can make sense to look for investments that aim to provide a steady stream of income.
“Our range of Quality Dividend ETFs provide investors with access to financially robust companies with high and sustainable dividends. These funds provide investors with access to long-standing active management insights within an index investing framework, while their low expense ratios and diversification traits make them an attractive proposition for the backbone of an equity portfolio.”