Close to $150 million under management
Since its launch in May 2010, the Russell High Dividend Australian Shares ETF (ASX code RDV) has grown faster by assets under management than any other ETF launched in Australia, reaching $142 million in the first nine months, Russell Investments announced today.
RDV has experienced significant demand from investors hungry for income, particularly from the SMSF sector. Since launch, RDV’s assets under management have grown at an average of around 35% each month.
RDV is based on a specially formulated index, the Russell Australia High Dividend Index, which seeks to deliver a dividend stream 1% higher than the broader market from a portfolio of around 50 Australian blue chip shares. The Russell index has a bias towards those companies that have a high but sustainable expected dividend yield and also demonstrate a history of paying dividends; dividend growth and consistent earnings.
“We developed RDV with SMSFs in mind so it’s pleasing to see such strong demand from these investors who love their share investing but also want sustainable income without sacrificing growth opportunities,” said Amanda Skelly, director Australia ETF business at Russell Investments. “ETFs are a good tool for SMSFs to diversify their portfolios and can be used as a complement to their own stock picks,” she added.
Ms Skelly said Russell has also seen growing institutional take up, particularly among investors with an income focus, or who are looking for alternative ways to manage short-medium term cash. Russell is planning to launch a number of new products this year with a focus on this growing institutional interest. “We think there are numerous ways institutions can use ETFs, including portfolio tilting and as a plug for an active manager,” said Ms Skelly.
“We are focused on creating ETFs that deliver a specific, targeted exposure and we are working on a number this year, including one we plan to release shortly, which we hope will replicate our success with RDV,” Ms Skelly concluded.