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4 Dividend ETFs Almost Flat YTD & Yielding At Least 3%
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The year 2022 as a whole could easily be attributed to the Russia-Ukraine war, red-hot inflation and rising-rate worries. No wonder, such worries caused an upheaval in the market this year. The Dow Jones and the S&P 500 lost 13.3% and 20.3%, respectively, while the Nasdaq Composite Index shed 30% this year.
The downfall is showing no signs of abating. No wonder, demand for dividend ETFs is high right now as these act as a great safety. Investors may be interested in equities or products that have the potential to offer capital appreciation as well as benchmark-beating yields. After all, dividends are one of the ways to ride out the turbulent times.
U.S. benchmark treasury yield touched 4.25% as on Oct 24 while one-year U.S. treasury note was 4.61% annually. Against this backdrop, dividend ETFs acted as a great safety. Be it a bull or a bear market, investors mostly love dividend-paying stocks. After all, who doesn’t like a steady stream of current income along with capital appreciation?
Dividend-paying companies are usually good for value investing and are in demand when volatility flares up. Investors have two options in this field – one with steady dividend growth (or dividend aristocrats) and the other with high yield. Companies that raise dividend regularly appear steadier than those that offer higher yields. But then high-yielding ones also make up for the capital losses to a large-extent, if there is any.
Several dividend ETFs offered better returns than the S&P 500 this year. Against this backdrop, below we highlight a few dividend ETF winners of 2022 so far that have breezed past the S&P 500.
ETFs in Focus
WisdomTree US High Dividend Fund (DHS - Free Report) – Up 0.7% YTD; Yields 3.79% Annually
The underlying WisdomTree U.S. High Dividend Index is a fundamentally weighted index that measures the performance of companies with high dividend yields selected from the WisdomTree Dividend Index. The fund charges 38 bps in fees.
First Trust Morningstar Dividend Leaders Index Fund (FDL - Free Report) – Down 0.1% YTD; Yields 4.82% Annually
The underlying Morningstar Dividend Leaders Index consists of stocks listed on one of the three major exchanges, NYSE, NYSE Amex or Nasdaq, that have shown dividend consistency and dividend sustainability. The fund charges 45 bps in fees.
iShares Core High Dividend ETF (HDV - Free Report) – Down 0.3% YTD; Yields 3.64% Annually
The underlying Morningstar Dividend Yield Focus Index offers exposure to high quality U.S. domiciled companies that have had strong financial health and an ability to sustain above average dividend payouts. The fund has a Zacks Rank #2 (Buy) and charges 8 bps in fees.
The underlying S&P 900 Dividend Revenue-Weighted Index is constructed using a rules-based methodology that starts with the S&P 900 Index, subject to a maximum 5% per company weighting. The fund charges 39 bps in fees.
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4 Dividend ETFs Almost Flat YTD & Yielding At Least 3%
The year 2022 as a whole could easily be attributed to the Russia-Ukraine war, red-hot inflation and rising-rate worries. No wonder, such worries caused an upheaval in the market this year. The Dow Jones and the S&P 500 lost 13.3% and 20.3%, respectively, while the Nasdaq Composite Index shed 30% this year.
The downfall is showing no signs of abating. No wonder, demand for dividend ETFs is high right now as these act as a great safety. Investors may be interested in equities or products that have the potential to offer capital appreciation as well as benchmark-beating yields. After all, dividends are one of the ways to ride out the turbulent times.
U.S. benchmark treasury yield touched 4.25% as on Oct 24 while one-year U.S. treasury note was 4.61% annually. Against this backdrop, dividend ETFs acted as a great safety. Be it a bull or a bear market, investors mostly love dividend-paying stocks. After all, who doesn’t like a steady stream of current income along with capital appreciation?
Dividend-paying companies are usually good for value investing and are in demand when volatility flares up. Investors have two options in this field – one with steady dividend growth (or dividend aristocrats) and the other with high yield. Companies that raise dividend regularly appear steadier than those that offer higher yields. But then high-yielding ones also make up for the capital losses to a large-extent, if there is any.
Several dividend ETFs offered better returns than the S&P 500 this year. Against this backdrop, below we highlight a few dividend ETF winners of 2022 so far that have breezed past the S&P 500.
ETFs in Focus
WisdomTree US High Dividend Fund (DHS - Free Report) – Up 0.7% YTD; Yields 3.79% Annually
The underlying WisdomTree U.S. High Dividend Index is a fundamentally weighted index that measures the performance of companies with high dividend yields selected from the WisdomTree Dividend Index. The fund charges 38 bps in fees.
First Trust Morningstar Dividend Leaders Index Fund (FDL - Free Report) – Down 0.1% YTD; Yields 4.82% Annually
The underlying Morningstar Dividend Leaders Index consists of stocks listed on one of the three major exchanges, NYSE, NYSE Amex or Nasdaq, that have shown dividend consistency and dividend sustainability. The fund charges 45 bps in fees.
iShares Core High Dividend ETF (HDV - Free Report) – Down 0.3% YTD; Yields 3.64% Annually
The underlying Morningstar Dividend Yield Focus Index offers exposure to high quality U.S. domiciled companies that have had strong financial health and an ability to sustain above average dividend payouts. The fund has a Zacks Rank #2 (Buy) and charges 8 bps in fees.
Invesco S&P Ultra Dividend Revenue ETF (RDIV - Free Report) – Down 0.9% YTD; Yields 4.67%
The underlying S&P 900 Dividend Revenue-Weighted Index is constructed using a rules-based methodology that starts with the S&P 900 Index, subject to a maximum 5% per company weighting. The fund charges 39 bps in fees.