Guggenheim ABCS Gives Us A-B-C But No Y
June 10, 2011 by Ron Rowland
Filed under Commentary, ETF IPOs (New ETFs)
The ABC acronym stands for Australia, Brazil, and Canada. The Guggenheim ABC High Dividend ETF (ABCS), launched earlier this week (6/8/11), packages the ten highest yielding stocks from each country into a convenient ETF format.
The 30 securities consist of U.S. listed ADRs from all three countries and stocks from Australia and Canada listed in their home countries. The underlying BNY Mellon ABC Index selects the top 10 stocks or ADRs with the highest yield for each country. The free-float market capitalization for each of the 30 holdings determines the individual weightings. The process currently produces country allocations of Brazil 46.8%, Australia 28.9%, and Canada 24.3%.
Top holdings include Cia de Bebidas Das Americas ADR (ABV) 9.2%, Telstra Corp (TLS) 8.4%, Telecomunicacoes de Sao Paulo ADR (TSP) 7.4%, Cia Energetica de Minas Gerais ADR (CIG) 5.5%, and Cia Siderurgica Nacional SA ADR (SID) 5.3%.
Sector breakdown is Utilities 20.0%, Telecommunications 17.2%, Industrials 13.0%, Consumer Discretionary 12.4%, Consumer Staples 11.2%, Energy 9.5%, Materials 9.1%, and Financials 7.8%.
ABCS will have an expense ratio of 0.65%. However, one of the most significant data points about this ETF is missing – the expected yield. Any fund that calls itself “high dividend” needs to at least give investors a hint. The yield information on the summary page is blank, and the fact card (pdf) does not provide any yield data for the index.
Although ABCS is the first ETF to address the A-B-C trio, there are many products focusing on foreign dividend paying stocks. Some examples include First Trust Dow Jones Global Select Dividend (FGD) with a current yield of 4.1% (and just an 18.1% allocation to U.S. stocks), PowerShares International Dividend Achievers (PID) with a yield of 2.8%, and WisdomTree Emerging Markets Equity Income (DEM) with a yield of 3.3%.
Disclosure covering writer, editor, and publisher: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.