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Tap Both High Dividend Yield & Growth With This New ETF (DIVG)
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Dividend investing remains a popular strategy for investors amid volatility and uncertainty. Although the latest inflation reading came in favorable for markets and the economy, the battle against inflation is far from over. We are yet to see substantiated cooling in inflation.
Against this time of uncertainty, dividend growth investing should rule. Probably this is why, a new ETF, namely Invesco S&P 500 High Dividend Growers ETF (DIVG), has been launched lately. Let’s delve a little deeper.
Inside DIVG
The Invesco S&P 500 High Dividend Growers ETF (DIVG) looks to track the investment results of the S&P 500 High Dividend Growth Index. The Index picks the 100 constituents with the highest forecasted dividend yield growth from the eligible stocks in the index universe subject to a 20% buffer to reduce turnover. Securities must have a forecasted dividend yield greater than zero and continued a dividend yield every year for at least five consecutive years.
The 101-stock fund is widely-distributed. No stock makes up more than 2.29% of the fund. Financials (22.86%), Utilities (17.34%) and Real Estate (13.18%) are the top three sectors of the fund. The fund charges 39 bps in fees.
How Does It Fit In a Portfolio?
Dividend aristocrats or dividend growth stocks are blue-chip dividend-paying companies with a long history of increasing dividend payments year over year. These generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis. Additionally, aristocrats tend to skew the portfolio to less-volatile sectors and mature companies.
These stocks have superior fundamentals that make dividend growth a quality and promising investment for the long term. These companies have a sustainable business model, a long track of profitability, rising cash flows, good liquidity, a strong balance sheet and some value characteristics.
A history of strong dividend growth indicates a likely hike in the future. Further, the fund is a winning combination of dividend growth as well we high dividend yield.
Competition
There is stiff competition in the dividend growth investing space. However, the prominent ones are mainly large-cap in nature. These include, ProShares S&P 500 Dividend Aristocrats ETF (NOBL - Free Report) , SPDR S&P Dividend ETF (SDY - Free Report) and Vanguard Dividend Appreciation ETF (VIG - Free Report) . These funds charge 35 bps, 35 bps and 6 bps in fees, respectively. Notably, the newbie’s expense ratio is in line with the peers. The newbie also offers a winning characteristic – high dividend yield growth. Hence, DIVG should not face any troubles in amassing investors’ assets.
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Tap Both High Dividend Yield & Growth With This New ETF (DIVG)
Dividend investing remains a popular strategy for investors amid volatility and uncertainty. Although the latest inflation reading came in favorable for markets and the economy, the battle against inflation is far from over. We are yet to see substantiated cooling in inflation.
Against this time of uncertainty, dividend growth investing should rule. Probably this is why, a new ETF, namely Invesco S&P 500 High Dividend Growers ETF (DIVG), has been launched lately. Let’s delve a little deeper.
Inside DIVG
The Invesco S&P 500 High Dividend Growers ETF (DIVG) looks to track the investment results of the S&P 500 High Dividend Growth Index. The Index picks the 100 constituents with the highest forecasted dividend yield growth from the eligible stocks in the index universe subject to a 20% buffer to reduce turnover. Securities must have a forecasted dividend yield greater than zero and continued a dividend yield every year for at least five consecutive years.
The 101-stock fund is widely-distributed. No stock makes up more than 2.29% of the fund. Financials (22.86%), Utilities (17.34%) and Real Estate (13.18%) are the top three sectors of the fund. The fund charges 39 bps in fees.
How Does It Fit In a Portfolio?
Dividend aristocrats or dividend growth stocks are blue-chip dividend-paying companies with a long history of increasing dividend payments year over year. These generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis. Additionally, aristocrats tend to skew the portfolio to less-volatile sectors and mature companies.
These stocks have superior fundamentals that make dividend growth a quality and promising investment for the long term. These companies have a sustainable business model, a long track of profitability, rising cash flows, good liquidity, a strong balance sheet and some value characteristics.
A history of strong dividend growth indicates a likely hike in the future. Further, the fund is a winning combination of dividend growth as well we high dividend yield.
Competition
There is stiff competition in the dividend growth investing space. However, the prominent ones are mainly large-cap in nature. These include, ProShares S&P 500 Dividend Aristocrats ETF (NOBL - Free Report) , SPDR S&P Dividend ETF (SDY - Free Report) and Vanguard Dividend Appreciation ETF (VIG - Free Report) . These funds charge 35 bps, 35 bps and 6 bps in fees, respectively. Notably, the newbie’s expense ratio is in line with the peers. The newbie also offers a winning characteristic – high dividend yield growth. Hence, DIVG should not face any troubles in amassing investors’ assets.