SAN DIEGO--(BUSINESS WIRE)--San Diego-based index development firm EQM Indexes LLC is launching a groundbreaking new index, the EQM Natural Resources Dividend Income Index (NDIVITR), providing exposure to global public companies in natural resource and commodity-related industries generating high income supported by free cash flow.
In the current inflationary environment of high energy and commodity prices, many natural resource and commodity-related equity companies in energy (i.e. oil, gas, and consumable fuels), chemicals, agriculture, precious and industrial metals and mining, paper products, and timber, are in the “golden age” of free cash flow.
Because these companies are not spending money on new capacity, balance sheets are becoming debt-free, and free cash flow is being returned to shareholders in abundance in the form of:
- Increasing fixed dividends,
- High variable or special dividends, and
- Share repurchases.
Cash Flow Monsters – Thanks to rising energy and commodity prices, many natural resource and commodity-related companies have become “cash flow” monsters.
A Play on the Energy Transition – The diversified index is composed of companies operating in “Old Energy” and “New Energy,” offering a bridge to the energy transition.
Commodity Income Supercycle – Pandemic-related supply-chain constraints, exacerbated by the Russian-Ukraine conflict, and accelerating demand for green energy commodities, coupled with years of underinvestment, have spurred what many believe is a commodity income supercycle.
Global Income Tied to Inflation But Not Subject to Foreign Tax Withholding – By investing in U.S.-traded ADR or OTC-listed share versions of global companies, investors can receive high levels of inflation-aligned income, not subject to foreign tax withholding.
As Jane Edmondson, EQM Indexes’ co-founder and CEO, explains, “We are excited to have created the seemingly ‘perfect’ ETF index for the times. While there are other products that provide similar industry exposure, our unique dividend-weighted approach is expected to generate the highest levels of inflation-proof income, with a dividend currently in excess of 9 percent, that is aligned with both the commodity supercycle and energy transition themes.”
Top index constituents include: China Petroleum & Chem, Petrobras, Ecopetrol SA, Rio Tinto, and Pioneer Natural Resources (as of 8/1/22).
Download the EQM Natural Resources Dividend Income whitepaper and review the fact sheet to learn more.
The Index has been licensed as an Exchange Traded Fund (ETF) by Amplify ETFs and is expected to be available soon as part of its income suite of funds.
About EQM Indexes
EQM Indexes LLC is a woman-owned firm dedicated to creating and supporting innovative indexes that track growth industries and emerging investment themes. Co-founded by Jane Edmondson, a former Institutional Portfolio Manager with more than 30 years in the investment industry, our index design expertise spans a wide range of asset classes and financial instruments. We partner with issuers and work jointly with other index firms to provide benchmarks for Exchange Traded Products (ETPs) such as Exchange Traded Funds (ETFs), Exchange Traded Notes (ETNs), and other similar products. EQM Indexes LLC also assists firms on a fee basis to design and implement their index ideas.
