Russell Investments has launched two exchange-traded funds focusing on high dividend yield investments in American companies. The funds, Russell High Dividend Yield ETF and Russell Small Cap High Dividend Yield ETF, are traded on the NYSE Arca and bet on companies that "demonstrate higher yields in order to deliver more predictable returns".
The high dividend yield ETF and the small cap high dividend yield ETF will track the market capitalization-weighted Russell U.S. Large Cap High Dividend Yield and Russell U.S. Small Cap High Dividend Yield Indexes, respectively.
“Russell research has shown that a total return approach that relies on a combination of dividends and capital appreciation can offer a more advantageous investment outcome than a simple dividend-yield strategy,” said Russell investment strategist David Koenig, in a statement.
“Focusing solely on dividend yield runs the risk of selecting securities that may have high dividend yields because they may be distressed and their price is falling or choosing companies that finance dividend payouts with debt.”
With the addition of the High Dividend Yield ETFs, Russell currently offers 26 ETFs in the U.S. market, including the Russell Investment Discipline ETFs.