Download Press Release – Solactive US Preferred Share Select Indices

PRESS RELEASE
24th of February 2017
Solactive launches Solactive US Preferred Share Select Index
and Solactive US Preferred Share Select Hedged to CAD
Index
SOLACTIVE AG
German Index Engineering
Guiollettstr. 54
60325 Frankfurt am Main
www.solactive.com
CONTACT
Henning Kahre, Head of Research
Phone: +49 (69) 719 160 01
Email: [email protected]
Lucia Pitteri, Public Relations
Phone: +49 (69) 719 160 311
Email: [email protected]
Licensed to BMO Global Asset Management as the underlying indices
for the BMO US Preferred Share Index ETF (ZUP) and the BMO US
Preferred Share Hedged to CAD Index ETF (ZHP)
The Solactive US Preferred Share Select Index and the Solactive US Preferred Share
Select Hedged to CAD Index bring to the market a new smart beta approach to
investing in US preferred shares. Specifically, these indices track the performance of
higher dividend paying US-listed preferred shares that have been selected based on a set
of market-cap, quality and liquidity screenings. The Solactive US Preferred Share Select
Hedged to CAD Index takes the concept a step further by adding a currency hedging to
Canadian Dollars through FX forward contracts. These indices are used as the underlying
indices for the BMO US Preferred Share Index ETF (ZUP/ZUP.U) and the BMO US
Preferred Share Hedged to CAD Index ETF (ZHP).
Preferred shares are a special equity class. Similar to common shares, they too represent
an ownership claim on the company’s assets and earnings. However, what sets
preferreds apart is the fact that they also share some characteristics with fixed-income
securities. Specifically, preferred shares expose investors to regular cash disbursements
in the form of fixed dividend payments that have been predefined at issuance as a
percentage of their face value. Holders of preferred shares have priority on dividend
payments over common shares. In addition, in case of company insolvency, preferred
shareholders benefit from preference treatment in the liquidation process, coming
second in line after debtholders in the redistribution of the company’s assets. These
characteristics can expose investors to more stable and predictable returns on stock
ownership compared to common shares.
Henning Kahre, Head of Research, Solactive AG, commented: “The Solactive US Preferred
Shares Select Index and its currency-hedged version, the Solactive US Preferred Share
Select Hedged to CAD, follow an income oriented strategy applied to preferred shares
listed in the US. Products linked to these indices allow investors to gain diversified and
cost-efficient exposure to high-rated US preferred shares with an above average
distribution yield.”
The Solactive US Preferred Shares Select Index is a Net Total Return index denominated
in CAD. The weighting scheme is based on the dividend yield of index components with a
3% cap per issuer to avoid concentration. The composition is readjusted quarterly. For
inclusion, issues must meet a minimum market capitalization of USD 100 million and a
minimum monthly volume traded over the last 6 months of 250,000 shares. The
Solactive US Preferred Share Select Hedged to CAD Index replicates the Solactive US
Preferred Share Select Index while hedging the currency exposure to CAD on a monthly
basis via FX forward contracts. Its composition is readjusted monthly.
For further information please visit https://www.solactive.com/?s=preferred&index=DE000SLA25V7
https://www.solactive.com/?s=preferred&index=DE000SLA25W5
NOTE TO EDITORS
About Solactive
Solactive AG is an innovative index provider that focuses on the development, calculation and distribution of
tailor-made indices over all asset classes. As of January 2017, Solactive AG served approximately 350 clients in
Europe, America and Asia, with approximately USD 100 billion invested in products linked to indices calculated
by the Company globally, primarily via 250 Exchange Traded Funds from a number of well-known providers.
Solactive AG was established in 2007 and is headquartered in Frankfurt.
www.solactive.com
Disclaimer
The information in this document does not constitute tax, legal or investment advice and is not intended as a
recommendation for buying or selling securities. Solactive AG and all other companies mentioned in this
document will not be responsible for the consequences of reliance upon any opinion or statement contained
herein or for any omission.
Solactive AG, Guiollettstr. 54, 60325 Frankfurt am Main, Germany. Registered Office: Frankfurt am Main,
Registration Court: Amtsgericht Frankfurt am Main, HRB: 79986, USt-IdNr.: DE 255 598 976. Management
Board: Steffen Scheuble and Christian Grabbe, Head of Supervisory Board: Dr. Felix Mühlhäuser.