ETFS S&P/ASX 300 High Yield Plus ETF ASX code: ZYAU
The intelligent alternative The Exchange Traded Fund that redefines yield
The intelligent alternative What is ETFS S&P/ASX 300 High Yield Plus ETF? At a glance Benchmark S&P/ASX 300 Shareholder Yield Index Management fee 0.35% Exposure ASX code Australian high yield equities ZYAU In order to achieve sustainable performance, the eligible stocks are screened for liquidity, dividend growth and free cash flows. As a result, ZYAU aims to provide a defensive return from high yielding stocks and a cyclical return from buyback companies. ZYAU can be traded by investors on the Australian Securities Exchange (ASX), just like a share and is settled and held in normal brokerage accounts. The ETFS S&P/ASX 300 High Yield Plus ETF (ASX Code: ZYAU) aims to provide investors with a return higher than the performance of the S&P/ASX 300. It invests in the 40 stocks from the S&P/ASX 300 with the highest shareholder yield, which is a combination of common dividends and common share buybacks. Strong historical performance As the strategy of the benchmark implements quality screening and considers both defensive and cyclical income, it has historically delivered strong outperformance. Cumulative Return 200 180 160 140 120 100 80 60 40 20 0 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Source: Bloomberg; returns in AUD S&P/ASX 300 Shareholder Yield S&P/ASX Small Ordinaries S&P/ASX 300 S&P/ASX Aus Dividend Opportunities
The intelligent alternative How share buybacks boost stock performance A share buyback, or share repurchase, is when a company buys back its shares from the market and returns cash to the shareholder. As a result, the number of shares outstanding is reduced. The benefits of a share buyback include: Increased shareholder value Share repurchase by the company reduces the shares outstanding leading to higher earnings per share (EPS). Increase in demand Higher EPS often signals that the shares are undervalued and therefore leads to increase in demand for the shares. Excess cash Companies buying back their shares with excess cash can be a signal that the company has a strong cash position. Confidence in the company Management decisions to buy back company shares generally signals confidence in its future performance and often provides share price support. Mitigating the effects of price shocks S&P/ASX 300 constituents Filter Rank Cap Calculate Shareholder Yield The monetary amount of common dividends and common share buybacks for each of the stocks in the S&P/ ASX 300 in the last year, divided by the total free float market capitalisation at the beginning of the buyback period. Liquidity 3 month Average Daily Value Traded no less than $1 million AUD. Free Cash Flow to Equity No less than the common dividends and common share buybacks in the past 1 year. Positive dividend growth 1 year Dividend Per Share Growth Rate >= 0 The SPDJI Index Committee ranks the filtered stocks by shareholder yield; selects the top 40 stocks. 40 highest yielding stocks are weighted by shareholder yield adjusted market cap; The weight of each stock within the index is capped at 10%. Rebalance semiannually.
Page 6 Key benefits High income distribution ZYAU aims to distribute higher dividends than S&P/ASX 300. The current dividend yield is around 5%*. Cost effective At just 0.35% per annum, ZYAU is a cost effective way to access the market compared to active funds. Well-diversified To achieve high yield while retaining balanced exposure, each stock is capped at 10% of the index weight. The only ETF to capture the buyback yield Buyback is an alternative form of yield as the company returns cash to its shareholders. Buybacks also signal the management team s confidence in a company s outlook. Quality companies To deliver both capital gain and income, ZYAU screens the high yield stocks with liquidity factor, dividend growth and free cash flows. Enhanced yield ZYAU weights the constituents by yield adjusted market cap, further enhancing the total yield of the portfolio. Good liquidity ZYAU invests in liquid stocks on the ASX. Easy to access The ETF is traded on the ASX like shares throughout the day. Transparent The portfolio, costs and pricing are publicly available. * There is no guarantee that a Fund will make any income or that this will be distributed to investors. Risk factors The following are just some of the risk factors which should be carefully considered by prospective investors before deciding whether to invest in the Units. Risks in relation to an Index Past performance is not an indication of future performance and the investment performance of the Units could be volatile. An investment in the Units involves a significant degree of risk. Risks in relation to the Fund An investment in an Index via a Fund will expose investors to risks inherent in holding the exposure via a Unit: Market Risk ETFs aim to replicate the price movements of their underlying benchmark or asset so their performance is dependent on the performance of the components of the underlying index. Tax As with the majority of investments, ETFs will normally incur some form of taxation. Each investor should obtain independent tax advice. Costs All ETFs incur costs, whether internal costs (related to the product) or external costs (incurred in trading the product). Tracking difference The structure and cost of an ETF means it may not track its underlying exactly. There is no guarantee that an ETF will produce returns generated by an underlying index. Liquidity Risk Although the Units will be quoted on the ASX there is no guarantee that there will be a liquid market for the Units. Furthermore, in certain circumstances the ASX may suspend trading of the Units or delist a Fund. There are also certain circumstances where the Responsible Entity may limit, reject, scale or delay redemptions. This is not an exhaustive list of risks in the relation to an investment in Units. Prospective investors should read the Product Disclosure Statement in relation to the risks associated with an investment in Units and consider the specific and general risks of an investment in Units. Prospective investors should also consult with their financial adviser prior to making any investment.
Talk to us today about diversifying your portfolio To request more information about our products or research: www.etfsecurities.com.au +61 2 8937 7245 infoau@etfsecurities.com Level 8, 242 Pitt Street, Sydney NSW 2000 Important Information This document is communicated by ETFS Management (AUS) Limited ( ETFS ) (Australian Financial Services Licence Number 466778). This document may not be reproduced, distributed or published by any recipient for any purpose. Under no circumstances is this document to be used or considered as an offer to sell, or a solicitation of an offer to buy, any securities, investments or other financial instruments and any investments should only be made on the basis of the relevant product disclosure statement which should be considered by any potential investor including any risks identified therein. This document does not take into account your personal needs and financial circumstances. You should seek independent financial, legal, tax and other relevant advice having regard to your particular circumstances. Although we use reasonable efforts to obtain reliable, comprehensive information, we make no representation and give no warranty that it is accurate or complete. Investments in any product issued by ETFS are subject to investment risk, including possible delays in repayment and loss of income and principal invested. Neither ETFS, ETF Securities Limited nor any other member of the ETF Securities Group guarantees the performance of any products issued by ETFS or the repayment of capital or any particular rate of return therefrom. The value or return of an investment will fluctuate and investor may lose some or all of their investment. Past performance is not an indication of future performance. Standard &/Poor s S&P Indices are trademarks of Standard &/Poor s Financial Services LLC. S&P and ASX, as used in the term S&P/ASX 300, is a trademark of the Australian Securities Exchange ( ASX ) and Standard &/Poor s Financial Services LLC ( S&P ) respectively, and has been licensed for use by ETFS. ETFS products are not sponsored, endorsed, sold or promoted by S&P or ASX, and neither S&P nor ASX make any representation regarding the advisability of investing in ETFS products. ETF Securities Australia Level 8, 242 Pitt Street, Sydney NSW 2000, Australia t +61 (2) 8937 7245 e infoau@etfsecurities.com w etfsecurities.com.au