TBG, a firm overseeing $4.6 billion in assets, has rolled out the TBG Dividend Focus ETF, a new investment vehicle that targets U.S.-based companies demonstrating consistent dividend growth. The move underscores the firm's belief in dividend growth as a significant indicator of a company's financial health, according to founder David Bahnsen.
The ETF aims to invest in 25-35 small-, mid-, and large-cap U.S-based companies, particularly those that maintain a dividend yield surpassing the S&P 500 average and register over 5% annual dividend growth spanning five-to-seven-year market cycles. This strategy does not rely on indexing but rather employs a rigorous research-based approach that includes deep fundamental analysis.
This analysis assesses various aspects of the targeted companies, such as balance sheet strength, earnings growth, leverage ratios, free cash flows, and payout ratios. Companies risk removal from the ETF if they experience a significant decline in their dividends, their investment thesis collapses, or their ability to sustain or grow their dividends is threatened.
Bahnsen emphasized that not all dividends are equal, thus underscoring the importance of a diligent selection process. The portfolio is managed by TBG with Madison Avenue Financial Solutions LLC acting as sub-advisor and Empowered Funds dba EA Advisors serving as Fund Advisor.
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