For investors seeking momentum, iShares Core Dividend Growth ETF (DGRO - Free Report) is probably on radar now. The fund just hit a 52-week high, and is up about 20.1% from its 52-week low price of $26.78/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
DGRO in Focus
This fund provides exposure to companies that have a history of consistently increasing dividends. It has key holdings in information technology, health care, financials, consumer staples, industrials and consumer discretionary with a double-digit allocation each. The fund charges 0.08% in expense ratio (see: all the Large Cap ETFs here).
Why the Move?
The dividend corner of the broad investing world has been an area to watch lately given the high levels of market volatility. North Korea tensions, and the aftermath of Hurricanes Harvey and Irma has made investors jittery. Against such a backdrop, when returns from the equity market are at risk, dividend-paying securities are the major sources of consistent income for investors. This is especially true as the companies that pay dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis.
More Gains Ahead?
Currently, DGRO has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely still some promise for those who want to ride on this surging ETF a little longer.
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