SAN DIEGO–(BUSINESS WIRE)–San Diego-based index development company EQM Indexes LLC is launching a groundbreaking new index, the EQM Natural Resources Dividend Income Index (NDIVITR), providing exposure to global public companies in the natural resource sectors and raw materials generating high incomes supported by free movement of capital.
In the current inflationary environment of high energy and commodity prices, many resource and commodity-related equity companies in the energy (i.e. oil, gas and consumable fuels), chemicals, agriculture, precious and industrial metals and mining, paper products and wood, are in the “golden age” of free cash flow.
Since these companies are not spending money on new capacity, balance sheets become debt-free and free cash flow is returned in abundance to shareholders in the form of:
Increase fixed dividends,
High variable or special dividends, and
Cash Flow Monsters – Thanks to rising energy and commodity prices, many resource and commodity companies have become “cash flow” monsters.
A game about the energy transition – The diversified index is composed of companies operating in “Old Energies” and “New Energies”, offering a gateway to the energy transition.
Commodity income supercycle – Pandemic-related supply chain constraints, exacerbated by the Russian-Ukrainian conflict, and accelerating demand for green energy products, coupled with years of underinvestment, have spurred what many see as a commodity income supercycle.
Worldwide income linked to inflation but not subject to foreign withholding tax – By investing in US-traded ADRs or publicly traded equity versions of global companies, investors can receive high levels of income in line with inflation, free of foreign withholding tax.
As Jane Edmondson, co-founder and CEO of EQM Indexes, explains: “We are delighted to have created the seemingly ‘perfect’ index ETF for the times. While there are other products that offer similar industry exposure, our unique dividend-weighted approach is expected to generate the highest levels of inflation-proof income, with a dividend currently exceeding 9%, aligned with both the commodity supercycle and the energy supercycle. transition themes.
The main constituents of the index include: China Petroleum & Chem, Petrobras, Ecopetrol SA, Rio Tinto and Pioneer Natural Resources (as of 08/01/22).
Download the EQM Natural Resources Dividend Income white paper and view 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 fund lineup.
About EQM Index
EQM Indexes LLC is a women-owned company dedicated to creating and supporting innovative indices that track growing industries and emerging investment themes. Co-founded by Jane Edmondson, a former institutional money manager with over 30 years of experience in the investment industry, our index design expertise covers a wide range of asset classes and instruments financial. We partner with issuers and work in conjunction with other index companies 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 helps companies, for a fee, to design and implement their index ideas.
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