Eric Ervin is the CEO of Reality Shares. Reality Shares creates research-driven, innovative investment products – including ETFs – to help reduce the effects of market noise and emotion on dividend investor performance.
The company has several new innovative dividend ETFs. The company’s dividend ETFs should be considered when looking for the best dividend ETFs. Reality Shares innovative new dividend ETFs include:
– Realty Shares DIVCON Leaders Dividend ETF (LEAD)
– Realty Shares DIVCON Dividend Defender ETF (DFND)
– Realty Shares DIVCON Dividend Guard ETF (GARD)
Eric Ervin’s interview is below. My questions to him are in bold.
You have an impressive background, I’m glad to have you on Sure Dividend. Please tell my audience a little about yourself, your career, and your experience creating ETFs and investing in general.
Thank you. I currently serve as President and CEO of Reality Shares, a firm solely focused on dividend growth investing. Before co-founding Reality Shares, I worked at Morgan Stanley for 14 years, building a wealth management franchise as a Certified Financial Planner practitioner and Chartered Financial Consultant.
At Reality Shares we offer a range of alternative ETFs pinpointing and capitalizing on investment in dividend growth and the stocks most likely to increase their dividends, as well as avoiding those most likely to cut their dividends.
The performance of the DIVCON system is very impressive. How did you come up with this strategy, and what is it designed to do?
Across the field of dividend investing, virtually all dividend-based strategies use rear-view mirror results as an indicator of future dividend growth. We wanted to come up with a strategy with a forward-looking focus on future dividend growth rather than using a purely historical look at historical dividend changes.
DIVCON forecasts and ranks a company’s ability to increase or decrease its future dividends by evaluating each firm based on seven quantitative factors, seeking to deliver a more accurate picture of a company’s fiscal health and better predict the probability of an increase or decrease in a company’s dividend over the next 12 months. While past performance does not guarantee future results, in back-tested analysis of the DIVCON methodology from 2001 through 2015, companies rated in the highest tier by the DIVCON index system (DIVCON 5) increased their dividend 96.6% of the time. DIVCON’s unique methodology offers advisors and investors a systematic way to assess dividend growth probability and use this information to make better informed investment choices—with the potential to outperform the market or provide stability in a volatile environment.
As a forward-looking tool, DIVCON offers some benefits compared to the Aristocrats and Dividend Achievers methodologies. For one, companies with long histories of increasing dividends will not offer the same future dividend growth potential compared to younger companies with solid fundamentals. Second, backward-looking strategies like the Aristocrats and Dividend Achievers are much more prone to dividend cuts. For example, during the Financial Crisis, there were 13 dividend cuts from the Aristocrats and 55 cuts from the Dividend Achievers, compared to 0 dividend cuts from the DIVCON Leaders stocks.