With equity markets hovering around record highs, more risk-averse investors may consider dividend exchange traded fund strategies. “While the stock market continues to trade in uncharted territory, investors can think of adopting defensive strategies based on their risk appetite by investing in high-dividend yield stocks.
The universe of dividend exchange traded funds is sizable and still growing. From the perspective of choice, that’s a positive, but locating the right payout funds to meet client needs can be a daunting task for advisors. WisdomTree’s Global Dividend Model Portfolio eases that burden, and does so with a mix of the issuer’s and third party products, as well domestic and international fare.
Income-minded investors should consider ETF strategies that provide consistent dividend growth at a rate that exceeds inflation. In the recent webcast, Yield vs Growth: How to Fight Inflation with Dividends , Matthew Page, Portfolio Manager, SmartETFs, warned that economists are projecting a median inflation forecast of 2.9% for 2021, followed by 2.3% for 2022, and 2.1% for 2023, all above the Federal Reserve’s 2% target.
As investors reach the halfway mark of 2021, it’s clear that some dividend strategies have performed than others. So far in 2021, the best-performing non-leveraged dividend ETFs were the Cambria Shareholder Yield ETF (SYLD) , which increased 43.24%; the VanEck Vectors Energy Income ETF (EINC) , which rose 38.50%; and the Invesco KBW High Dividend Yield Financial ETF (KBWD) , which is up 29.08%.
Getting quality dividends that can offer a higher yield than the current benchmark 10-year Treasury note need not be an expensive affair with the Global X S&P 500 Quality Dividend ETF ( QDIV ), which comes in at a low 0.20% expense ratio.
With inflation at the forefront of so many economic and financial market conversations these days, an easy way for investors to get over fears of a rising Consumer Price Index ( CPI ) reading is with a strategy many are already deploying: dividend growth.
When choosing a dividend growth ETF, dividends aren’t the only thing that matter. The cost to hold the ETF over time is an important consideration. Dividend growth ETFs reap the most reward for investors who can hold on to them for a long time.
Sustainability is all the rage these days, as asset allocators prioritize environmental stewardship and social and governance progress. However, seasoned dividend investors know sustainability in another way: gauging a company’s ability to not only maintain its current payouts, but grow them over the long-term.
Investors can always use more income, and there exist several ETFs that are paying out over 7% in annual dividend yields. Dividend yield is a measure of how much of security’s value is returned to shareholders in the form of dividends.
Investors looking for immediate, yet diversified, boosts to their income can look toward ETFs with high dividend yields. Dividend yield is a measure of how much of security’s value is returned to shareholders in the form of dividends.
Income-minded investors can consider an actively managed dividend exchange traded fund strategy to help keep ahead of inflation. The SmartETFs Dividend Builder ETF (NYSE Arca: DIVS) is an actively managed dividend growth strategy that seeks dividend-paying companies that have provided an inflation-adjusted cash flow return on investment of at least 10% in each of the last 10 years.
S&P Dow Jones Indices has unveiled the S&P Dividend Growers Index Series , a new family of indices tracking companies that have consistently increased their dividend payments every year for a specified number of years. The indices target companies that have consistently increased their dividend payments every year for a specified number of years.
Investors seeking income should consider the Global X S&P 500 Covered Call ETF (NYSE: XYLD ). It currently has a dividend yield in excess of 9%. This ETF sells call options on the S&P 500. This strategy could limit the ETF’s price appreciation potential, but it results in a high level of income.
As investors well know, there’s growth investing and there’s value investing. The concept of growth at a reasonable price (GARP) fills the gap between the two, and it’s accessible with the Barron’s 400 ETF (NYSEArca: BFOR ) . “Some investors have sought to bridge the Value–Growth divide through a hybrid strategy, opting for the growth at a reasonable price (GARP) approach popularized by Fidelity manager Peter Lynch ,” according to the CFA Institute .
