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Dividend Growth Picks Momentum: ETFs to Gain

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According to the latest quarterly Janus Henderson Global Dividend Index findings, global dividends are hovering above their pre-pandemic high. There was record quarterly dividends of $544.8 billion in Q2, up 11.3% on a headline basis.

As much as 94% of companies in the index raised dividends or held them steady. Global dividends have more than recovered the decline witnessed during the pandemic – this index recoiled to a record 214.1, putting it back to the pre-pandemic trend.

European and UK payouts jumped 28.7% and 29.3% on an underlying basis respectively thanks mainly to financials and German car makers.  The United States, Canada, Switzerland and the Netherlands also recorded all time quarterly records.

Emerging market dividends increased 22.5% on an underlying basis helped by oil producers. Soaring cash flows from high oil prices helped companies in doing so.The Janus Henderson Global Dividend Index now expects 2022 payouts to reach $1.56 trillion, marking an increase of 5.8% on a headline basis, equivalent to an underlying rise of 8.5%.

Two fifths of the dividend increase came from the financial sector. Morgan Stanley and Wells Fargo were biggest contributors to growth in U.S. payouts. No company out of the 77 U.S. financials in the specified index made a cut. As many as 97% of companies in North America boosted their dividends in the second quarter or kept them steady.

Against this backdrop, below we highlight a few dividend growth ETFs.

ETFs in Focus

Vanguard Dividend Appreciation ETF (VIG - Free Report)

The underlying S&P U.S. Dividend Growers Index consists of common stocks of companies that have a record of increasing dividends over time. The fund charges 6 bps in fees and yields 1.86% annually.

ProShares S&P 500 Dividend Aristocrats ETF (NOBL - Free Report)

The underlying S&P 500 Dividend Aristocrats Index targets companies that are currently members of the S&P 500, have increased dividend payments each year for at least 25 years & meet certain market capitalization & liquidity requirements. The fund charges 35 bps in fees and yields 1.95% annually.

WisdomTree US Quality Dividend Growth Fund (DGRW - Free Report)

The underlying WisdomTree U.S. Quality Dividend Growth Index is a fundamentally weighted index that consists of dividend-paying stocks with growth characteristics. The fund charges 28 bps in fees and yields 2.00% annually.

WisdomTree International Hedged Quality Dividend Growth Fund (IHDG - Free Report)

The underlying WisdomTree International Hedged Quality Dividend Growth Index is designed to provide exposure to the developed market companies while at the same time neutralizing exposure to fluctuations between the value of foreign currencies and the U.S. dollar. The fund charges 58 bps in fees and yields 4.40% annually.

ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL - Free Report)

The underlying S&P MidCap 400 Dividend Aristocrats Index targets companies that are currently members of the S&P MidCap 400 Index and have increased dividend payments each year for at least 15 years. The fund charges 40 bps in fees and yields 2.43% annually.

ProShares Russell 2000 Dividend Growers ETF (SMDV - Free Report)

The underlying Russell 2000 Dividend Growth Index targets companies that are currently members of the Russell 2000 Index and have increased dividend payments each year for at least 10 years. The fund charges 40 bps in fees and yields 2.27% annually.

WisdomTree International Quality Dividend Growth Fund (IQDG - Free Report)

The underlying WisdomTree International Quality Dividend Growth Index is a fundamentally weighted Index providing exposure to dividend paying developed market companies. It is comprised of the top 300 companies from the WisdomTree International Equity Index with the best combined rank of growth and quality factors. The fund charges 42 bps in fees and yields 4.89% annually.


 

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