Bristol Gate launches two dividend-focused ETFs

Morningstar Canada 21 February, 2018 | 6:00PM

Bristol Gate Capital Partners Inc. today became Canada's newest provider of exchange-traded funds with the launch of Bristol Gate Concentrated Canadian Equity (symbol: BGC) and Bristol Gate Concentrated U.S. Equity (BGU).

Managed internally by the Toronto-based firm, both ETFs invest in a portfolio of between 20 and 30 publicly traded securities. Using a proprietary methodology and fundamental analysis, the managers build portfolios of stocks that will exhibit the largest expected dividend growth over the next fiscal year.

Bristol Gate ranks companies by analyzing fundamental measures, including dividend growth and cash-flow growth. Each calendar quarter, the portfolios will be rebalanced so that all of the securities are equally weighted at that time.

The Canadian equity ETF invests primarily in dividend-paying equity securities that are constituents of the S&P/TSX Composite Index. The holdings of the U.S. equity ETF are primarily stocks that are constituents of the S&P 500 Index. This ETF is also available in U.S.-dollar-denominated units (BGU.U).

Each of the ETFs may also invest up to 10% of assets, at the time of purchase, in dividend-paying equity securities that are part of the MSCI ACWI Index, a global equity index.

The ETFs will be broadly diversified by industry, investing in six or more of the Global Industry Classification Standard (GICS) sectors. The sector weightings will be determined primarily on the basis of expected dividend growth.

The management fee for each ETF is 0.70%, not including expenses.

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