The Reality Shares DIVS ETF (DIVY) has outperformed the S&P 500 since its launch in December because it eliminates the volatility from the portfolio and focuses solely on dividend growth, said Eric Ervin, CEO of Reality Shares. Ervin added that the DIVY differs from other dividend funds because it uses futures and options to capture dividend growth as opposed to buying shares of individual companies. For example, the fund might own derivatives of a company like Coca Cola which has seen its dividend grow at a far quicker rate than its stock price in recent years. Finally, Ervin said this strategy has been used successfully by institutions for many years, but this is the first time it is being introduced to the public in an ETF.
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