If You Invested in TBG Dividend Focus ETF (TBG)

The TBG Dividend Focus ETF (NYSE: TBG) is an actively managed exchange-traded fund that invests in publicly traded companies with a long history of growing their dividends. The fund is managed by The Bahnsen Group, a wealth management firm that emphasizes dividend growth equity investing. According to public disclosures, the ETF was launched in November 2023 to implement The Bahnsen Group’s dividend growth philosophy within an exchange-traded fund structure.

TBG is described as a diversified actively managed ETF that generally holds a concentrated portfolio of approximately 25 to 35 small-, mid- and large-cap companies that are primarily U.S.-based. The companies included in the fund typically have a track record of growing their dividends over time and generally maintain a dividend yield greater than the average dividend yield of the S&P 500. The ETF’s approach favors companies that have grown their dividends by more than 5% per year over a multi-year market cycle, reflecting a focus on both income and dividend growth.

The portfolio is built using bottom-up fundamental analysis. Selection criteria referenced in public materials include balance sheet strength, earnings growth, leverage ratios, free cash flows, payout ratios, and the rate at which a company distributes earnings to shareholders. The management team also considers a company’s capital allocation track record. Companies may be removed from the ETF if their dividend declines notably, if the investment thesis deteriorates, or if management does not maintain or grow the dividend.

The ETF does not track any index, which means holdings are determined by the portfolio manager’s research rather than by a benchmark methodology. The Bahnsen Group serves as portfolio manager to the fund under Madison Avenue Financial Solutions LLC as sub-advisor, while Empowered Funds, doing business as EA Advisors, is identified as the fund advisor in public communications. The fund is distributed by Quasar Distributors, LLC.

Public announcements describe TBG as a way for investors to gain exposure to companies that have demonstrated consistent dividend growth. The strategy reflects the view that dividend growth can be an indicator of financial health and that companies able to grow dividends over time may support long-term compounding of income. At various points after launch, public statements have noted that the ETF surpassed specific asset milestones, illustrating that assets under management have grown since inception, although asset levels can change over time.

In addition to its investment strategy, TBG has highlighted its approach to proxy voting. The ETF has engaged Bowyer Research to advise on proxy voting using the Bowyer Research Proxy Voting Guidelines. These guidelines are described as focusing on shareholder capitalism and aiming to depoliticize corporate governance. According to public statements, the guidelines are intended to support value creation, free enterprise, market competitiveness, and meritocracy, and to oppose corporate governance proposals that focus on controversial political and cultural issues. The ETF’s alignment with these guidelines is presented as consistent with its stated goal of maximizing shareholder value.

The Bahnsen Group, which manages the ETF’s strategy, is described in public materials as a national wealth management firm with multiple U.S. office locations and a particular focus on dividend growth equity investing. The firm emphasizes a research-driven, selective approach to identifying companies with strong dividend growth records and financial fundamentals. TBG Dividend Focus ETF extends this philosophy into a publicly traded fund format, allowing investors to access a curated portfolio of dividend growth companies through a single ticker.

Business model and investment approach

The business model of the TBG Dividend Focus ETF centers on offering investors an actively managed portfolio of dividend growth equities. The fund’s revenue structure as an ETF is not detailed in the provided materials, but the investment approach is described in some depth. The ETF seeks companies with a history of dividend growth, generally higher-than-average dividend yields relative to the S&P 500, and financial characteristics that support ongoing dividend payments and potential increases.

Fundamental analysis is emphasized, with attention to metrics such as free cash flow, leverage, and payout ratios. Public descriptions state that selectivity is important because not all dividends are viewed as equally attractive. The ETF’s process involves ongoing monitoring of portfolio companies, with the possibility of selling positions if dividend policies weaken or if the original investment rationale no longer holds.

Governance and proxy voting philosophy

The ETF’s relationship with Bowyer Research for proxy voting advice is a notable aspect of its governance approach. The Bowyer Research Proxy Voting Guidelines are described as a framework focused on shareholder capitalism. Public statements indicate that these guidelines are intended to support proposals and governance practices that emphasize value creation and market competitiveness, while opposing proposals that are characterized as emphasizing controversial political and cultural issues. This framework is presented as aligned with the ETF’s goal of focusing on shareholder value in its ownership and voting decisions.

Role within the dividend growth investing space

According to public communications, The Bahnsen Group has a special focus on dividend growth equity investing, and the TBG Dividend Focus ETF is positioned as an expression of that focus in ETF form. The fund targets companies that not only pay dividends but have grown those dividends over time, with an emphasis on the growth rate of dividends rather than just the level of income. This reflects the view, articulated in public statements, that dividend growth can be a meaningful indicator of corporate financial health and sustainability.

The ETF’s active management, concentration in a limited number of holdings, and stated reliance on detailed fundamental analysis distinguish it from index-tracking dividend funds as described in the available materials. While specific performance figures and asset levels are time-sensitive and can change, the core philosophy of emphasizing dividend growth, financial strength, and selective security selection is presented as central to the fund’s identity.

Risk and disclosure considerations

Public materials associated with TBG Dividend Focus ETF emphasize that investments involve risk and that principal loss is possible. They also note that the fund is actively managed and may not produce intended results, and that the ETF structure can involve trading at a premium or discount to net asset value, as well as brokerage costs. Additional risk disclosures mention considerations related to small- and mid-capitalization companies, including potentially higher volatility and lower trading volumes compared with larger companies.

Prospectus and summary prospectus documents are referenced in public communications as the primary sources for detailed information about the fund’s objectives, risks, charges, and expenses. These materials are identified as important for potential investors to review before making investment decisions.