January 14, 2016

Reality Shares, Inc., a provider of differentiated Exchange-Traded Fund (ETF) strategies, launched two new ETFs, DFND and GARD, based on its innovative DIVCON™ Methodology. Unlike many dividend funds based on decades-old dividend history or yield, the new passive ETFs feature rules-based stock selection and weighting using a proprietary dividend health rating methodology, DIVCON, which systematically ranks companies’ future dividend growth prospects based on a weighted average of seven factors. Both ETFs were listed today on the BATS Exchange.

Both the DIVCON Dividend Defender ETF and DIVCON Dividend Guard ETF seek to mitigate risk by combining long stock positions in the large-cap companies with the highest probability of increasing their dividends with short stock positions in large-cap companies with the highest probability of cutting their dividends, as measured by their DIVCON dividend health scores. The GARD ETF additionally features dynamic market exposure based on Reality Shares’ Guard Indicator™, a proprietary quantitative gauge of market strength. Like the Reality Shares DIVCON Leaders Dividend ETF (LEAD) launched earlier this month, both new index ETFs feature rules-based stock selection and weighting based on DIVCON scores.

The DIVCON Dividend Defender ETF (DFND) seeks to provide returns through the use of a hedged (long/short) equity portfolio. The Fund invests 75% of its portfolio market value in the large-cap U.S. companies with the highest probability of increasing their dividends within a year, based on their DIVCON dividend health scores. The remaining 25% of the portfolio market value is used to short the large-cap U.S. companies with the highest probability of cutting their dividends within a year. The expense ratio for DFND is 0.95%.

The DIVCON Dividend Guard ETF (GARD) seeks to reduce the impact of declining markets on Fund performance by dynamically adjusting its market exposure based on the strength of the market as determined by Reality Shares’ Guard Indicator, a quantitative tool that gauges market strength by comparing technical trends in market price and volatility to historical averages. When the Guard Indicator signals a strong market, the Fund invests 100% of its portfolio in the large-cap U.S. companies with the highest probability of increasing their dividends within a year, based on their DIVCON dividend health scores. When the Guard Indicator signals a weak market, that long stock weight is reduced to 50%, and the remaining 50% of the portfolio is allocated to a short stock position in the large-cap U.S. companies with the highest probability of cutting their dividends within a year. The expense ratio for GARD is 1.05% with a net expense ratio of 0.95%*.

For more information and a copy of the Funds’ prospectuses, please click here or call (855) 595-0240.


* Net fund expenses for GARD reflect a Contractual Fee Waiver through February 28, 2017.

The models used in the GUARD indicator may be incomplete, flawed or based on inaccurate assumptions.