New exchange-traded funds (ETFs) seemingly hit the ASX every other month these days. To illustrate, we welcomed a new space-themed ETF to the ASX boards just last week. But it is far less common to see a dividend-focused ETF hit the ASX.
Yet that's exactly what this week has brought income investors. Yesterday saw the debut of the Plato Global Shares Income Fund – Active ETF (ASX: PGI2).
If that name seems familiar to you, it might be thanks to Plato Income Maximiser Ltd (ASX: PL8). This listed investment company (LIC), which has been around for a few years, is a popular income investment on the ASX. That's thanks, in no small part, to its habit of paying out monthly dividends.
Unlike the Income Maximiser, PGI2 is an ASX ETF. Let's dive into how it works.
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How does this new ASX dividend ETF work?
Put simply, the Plato Global Shares Income Fund is an active ETF that aims to deliver more income than its benchmark index, the MSCI World ex Australia, Net Returns Unhedged Index.
This ETF has only been on the ASX for a day and a half. However, Plato also offers an unlisted iteration as a managed fund, which has been available for investment since 1 March 2016.
As of 30 April, this fund has returned an average of 10% per annum since that time. 5.7% of that 10% per annum came from dividend income distributions. That's also the trailing 12-month yield for the fund, as of 30 April anyway. Its more recent performance has clocked in at an average of 19.2% per annum over the past three years, and 13.6% per annum over the past five.
Like its Plato Income Maximiser cousin, the Plato Global Shares Income Fund will also pay out monthly dividend distributions.
Unfortunately, Plato hasn't yet listed the Global Shares Income Fund's exact holdings. However, from the data that is available, it can be assumed that US tech stocks, possibly including Apple, Nvidia, Alphabet, and Broadcom, are top holdings. That's in addition to more traditional payers, including financial stocks, consumer staples companies, and healthcare shares. This dividend ETF also includes a diversified range of European and Asian stocks, although these are less prominent in its largest holdings.
Yesterday, PGI2 units floated at about $10.75 each. This ASX dividend ETF is currently hovering around that level, trading at $10.76 at the time of writing. Let's see how it fares from here.
