GBDV Post Rebalance Review Q2 2022

by Justin Lowry, President & CIO, Global Beta Advisors, LLC

The Global Beta Smart Income ETF (“GBDV”), in accordance with our Global Beta Smart Income Index, rebalanced at the close of 06/17/22.

  • GBDV rebalances quarterly to align itself with high dividend paying companies at attractive prices on a diversified basis.
  • The fund’s rebalance resets its portfolio characteristics to improve the portfolio’s yield, valuations, and neutralizes sector bias.
  • Global Beta’s customization process for this factor seeks to identify high dividend paying companies across every sector and at more attractive valuations.
  • As bond markets have cratered through the first part of this year, investors need to find creative ways to get exposure to yield. We believe a diversified equity income strategy that focuses on higher quality companies with better valuations is the way to achieve that objective.
Investment Research

Below you will find notable securities that were removed from the index, given their current yields and valuations:

Notable Deletions

Ticker Company Name Former Index Weight Current Price-to-Sales Ratio Current Dividend Yield
ACC American Campus Communities, Inc. 0.08% 9.22 2.91%
SLG SL Green Realty Corp. 0.04% 4.46 7.35%
CMA Comerica Incorporated 0.19% 3.46 3.56%
PPL PPL Corporation 0.43% 3.19 3.43%
AEP American Electric Power Company, Inc. 1.18% 2.74 3.44%
NI NiSource Inc 0.34% 2.34 3.39%
PGR Progressive Corporation 3.72% 1.37 0.36%
SWX Southwest Gas Holdings, Inc. 0.31% 1.29 2.87%
FLO Flowers Foods, Inc. 0.33% 1.18 3.55%

Former weight as of 03/18/22. Current price-to-sales ratio as of 06/17/22. 12-month trailing dividend yield based on price from 06/17/22 and 12-month trailing revenue as of most recently reported fiscal quarter. Price-to-sales takes the company’s current market capitalization and divides by the company’s most recently reported 12-month trailing revenue.

Below you will find securities that the index added during the rebalance, given their yields and valuations:

Notable Additions

Ticker Company Name New Index Weight Current Price-to-Sales Ratio Current Dividend Yield
PDCO Patterson Companies Incorporated 0.49% 0.44 3.65%
HBI Hanesbrands Inc. 0.51% 0.52 5.87%
ENR Energizer Holdings, Inc. 0.23% 0.62 4.57%
HPE Hewlett Packard Enterprise Co. 2.12% 0.67 3.41%
OMC Omnicom Group Inc 1.06% 0.96 4.28%
C Citigroup Inc. 4.68% 1.18 4.29%
NJR New Jersey Resources Corporation 0.19% 1.65 3.38%
KEY KeyCorp 0.57% 2.23 4.40%
CFG Citizens Financial Group, Inc. 0.53% 2.25 4.30%
ASB Associated Banc-Corp 0.08% 2.58 4.20%

New weight as of 06/17/22. Current price-to-sales ratio as of 06/17/22. 12-month trailing dividend yield based on price from 06/17/22 and 12-month trailing revenue as of most recently reported fiscal quarter. Price-to-sales takes the company’s current market capitalization and divides by the company’s most recently reported 12-month trailing revenue.

Turnover Recap

Current Price-to-Sales Ratio Current 12-month Trailing Dividend Yield
Additions 1.31 4.23%
Deletions 3.02 3.42%

Current price-to-sales ratio as of 06/17/22. 12-month trailing dividend yield based on price from 06/17/22 and 12-month trailing revenue as of most recently reported fiscal quarter. Price-to-sales takes the company’s current market capitalization and divides by the company’s most recently reported 12-month trailing revenue. Dividend yield is calculated by dividing the dividends paid by the company over the past 12 months into the company’s current market capitalization.

As a reminder, our index methodology contemplates yield across all sectors. While yield for some securities may seem low on an absolute basis, it is actually high among its peers. This allows the index to be more diversified while also delivering the opportunity for a strong yield. The Turnover Recap table is a summary of the characteristics between the securities that were added versus those that were removed.

Please visit https://gbdv.globalbetaetf.com to view the index’s new holdings and find out more about the index and its investment objective! 

Dividends represent past performance, and there is no guarantee that they will continue to be paid. The dividend yield is not representative of the index’s yield.

Before investing you should carefully consider the Fund’s investment objectives, risks, charges, and expenses. This and other information is in the prospectus or summary prospectus. A copy may be obtained by visiting www.globalbetaetfs.com or calling (833) 933-2083. Please read the prospectus or summary prospectus carefully before investing.

The fund’s primary risks:

Mid-Capitalization Securities Risk
The securities of mid-capitalization companies are often more volatile and less liquid than the stocks of larger companies and may be more affected than other types of securities during market downturns. Compared to larger companies, mid-capitalization companies may have a shorter history of operations, and may have limited product lines, markets or financial resources.

Concentration Risk
To the extent that the Target Index is concentrated in a particular industry, group of industries or sector, the Fund is also expected to be concentrated in that industry, group of industries or sector, which may subject the Fund to a greater loss as a result of adverse economic, business or other developments affecting that industry, group of industries or sector.

Dividend-Paying Securities Risk
The Fund’s emphasis on dividend-paying stocks involves the risk that such stocks may fall out of favor with investors and underperform the market. Also, a company may reduce or eliminate its dividend after the Fund’s purchase of such a company’s securities.

Large Capitalization Securities Risk
The securities of large market capitalization companies may underperform other segments of the market because such companies may be less responsive to competitive challenges and opportunities and may be unable to attain high growth rates during periods of economic expansion.

Distributor: Compass Distributors, LLC

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