Research Report:

Dividend Watch: Equity Income Trends and Strategies

O’Shares U.S. Quality Dividend ETF (OUSA)

O’Shares U.S. Quality Dividend ETF (OUSA)

Seeks companies with strong profitability, balance sheets and dividend growth which may reduce risk of dividend yield traps while providing a growing source of income.

Quality Dividends for Income Growth and Stability?

Quality Dividends for Income Growth and Stability?

We believe companies with strong dividend growth and coverage have an increased likelihood that they will be able to maintain and grow dividends paid to investors even during periods of economic duress.

The Power of Dividend Investing

The Power of Dividend Investing

Dividends are payments that companies make to shareholders at regular intervals, usually quarterly. Dividends and compounding are a strong force in generating investor returns and growing income.

Quality with strong performance with less risk

Quality with strong performance with less risk

Quality may be defined as companies with stronger profitability and balance sheets, those exhibiting higher return on assets and lower leverage.

Quality Dividends: Stronger performance, less risk and less downside than Value

We believe the benefits of a quality dividend strategy may include income growth, strong performance and lower equity risk than Value. OUSA has outperformed the Russell 1000 Value Index since inception with less risk and downside capture.

Since inception (7/14/2015):
• OUSA outperformed Value by over 2% on an annualized basis
• OUSA captured just 87% of market downside vs. 110% for Value. (Reference benchmark: S&P 500)

 

  Performance Risk Upside/Downside Capture
  1Y 5Y S/I Volatility Upside Downside Up/Down Ratio
OUSA 18.40% 12.84% 11.70% 16.06% 80% 87% 0.92
Value 22.21% 10.33% 9.55% 18.78% 87% 110% 0.79

Source: Bloomberg Finance L.P. Data as of 11/30/2021. Value: Russell 1000 Value Index. *Since Inception of OUSA: 7/14/2015. Volatility: Annualized daily standard deviation since inception (7/14/2015).

Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than original cost. Returns beyond one year are annualized. For most recent month end performance, please visit oshares.com.

For OUSA standardized performance and fees click here.

For Indices and Financial Definitions, click here.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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Quality Dividends or Value for Income?

Over 90% of stocks in OUSA increased their dividends in the past year vs. ~75% for Russell 1000 Value dividend paying stocks.

Energy, Real Estate, Consumer Discretionary and Industrials are among sectors with the biggest proportion of companies that cut dividends.

Stocks of companies in OUSA experienced proportionately less dividend cuts in all sectors vs. Value.

  Trailing 12-month Dividend Change
(% of Dividend Payers)
  WEIGHT INCREASE DECREASE NO CHANGE
Sector OUSA Value OUSA Value OUSA Value OUSA Value
Health Care 22% 17% 93% 88% 0% 7% 13%
Information Technology 20% 10% 96% 77% 4% 7% 16%
Industrials 15% 12% 82% 80% 14% 9% 5% 11%
Consumer Staples 15% 7% 100% 88% 8% 5%
Consumer Discretionary 14% 6% 100% 60% 28% 12%
Financials 7% 21% 100% 75% 9% 17%
Communication Services 7% 7% 67% 56% 6% 33% 39%
Utilities 0% 5% 100% 89% 8% 3%
Energy 0% 5% 56% 28% 16%
Materials 0% 4% 73% 8% 19%
Total 100% 100% 93% 75% 4% 11% 3% 14%

Source: Bloomberg Finance L.P., data as of 11/30/2021.

Past performance does not guarantee future results. Investors cannot directly invest in an index.

For Indices and Financial Definitions, click here.

OUSA: Key portfolio metrics

Companies With Leverage Ratios In The Bottom Half Outperform Over The Last 5 Years

Source: Bloomberg Finance L.P., data as of 11/30/2021. OUSA Index: O’Shares U.S. Quality Dividend Index.
For Indices and Financial Definitions, click here.

Past performance does not guarantee future results. Investors cannot directly invest in an index and unmanaged index returns do not reflect
any fees, expenses or sales charges.

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