Lyxor’s new ETF offers better balance of quality/yield
Lyxor Asset Management has launched an ETF based on its SG Quality Income Index, launched last June.
The Lyxor ETF SG Global Quality Income is launched on the NYSE Euronext exchange. This new fund, designed by Andrew Lapthorne and Dylan Gryce (pictured) of Société Générale Research, offers global exposure to the performance of equities from high quality companies that offer above average, and sustainable, dividend yields.
The Quality Income strategy aims to provide bond-like features (lower risk income) along with equity-like performance (capital appreciation). Lyxor says the fund could provide investors with “an ideal alternative to high yield or corporate bonds”.
As Lyxor explains, “equity returns have been extremely volatile over the past decade. This has pushed many investors who are looking to generate yield and/or limit drawdown risk towards the bond markets. Quality Income stocks represent the most stable companies in the world and can offer investors a less volatile way to benefit from a potentially attractive level of income and capital growth.”
The Lyxor ETF SG Global Quality Income seeks to provide investors with high-quality exposure to global developed equity markets through the SGQI Index. This Index has been designed by Société Générale Research using a proprietary index methodology, which focuses on stocks that offer a high dividend yield. Stocks are selected from a universe of high-quality companies that are deemed to offer profitability, operating efficiency and balance sheet strength.
The Index philosophy is based on two simple ideas: first, a large portion of historical total returns from the equity markets come from dividend yield; and, second, high quality companies tend to outperform poorer quality companies.
This Index seeks to deliver a similar risk profile to many low volatility strategies with the added advantage of a higher dividend yield.