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5 Dividend ETFs to Play to Follow Goldman Sachs

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Though Trump offered the much-needed respite to global markets on Aug 13 by delaying the proposed tariffs on many Chinese imports that are not yet subjected to higher tariffs, many market watchers including Goldman Sachs do not foresee any trade deal before Trump’s 2020 election.

So, the investing backdrop could remain volatile in the coming days. Thus, it is better to bet on the safer dividend ETFs, more so because the Fed and many other central banks are dovish this year. Also, dividend stocks perform well in a low-rate environment.

Goldman Sachs is now advising clients to bet on high-dividend payers, which it says are “trading at their cheapest levels in nearly 40 years relative to stocks with low yields.” The S&P 500 dividends increased 9% in the first and second quarters of this year, per Goldman.

As of Aug 19, 2019, the yield on the 10-year U.S. notes were about 1.60%. With such low yields prevailing, buying high-dividend stocks and ETFs was a good idea (read: 5 High-Dividend ETFs Available Under $20).

FlexShares Quality Dividend Defensive Index Fund (QDEF - Free Report) – Yield 2.78%

The underlying Northern Trust Quality Dividend Defensive Index is designed to provide exposure to a high-quality income-oriented portfolio of long-only U.S. equity securities, with an emphasis on long-term capital growth and a targeted overall beta that is generally between 0.5 to 1.0 times that of the Northern Trust 1250 Index that are selected based on expected dividend payment and fundamental factors (read: 5 Dividend ETFs for Safety and Higher Yields).

WBI Power Factor High Dividend ETF(WBIY - Free Report) – Yield 4.86%

The underlying Solactive Power Factor High Dividend Index tracks the performance of 50 U.S.-listed stocks among large, mid and small-caps, which exhibit high dividend yield and strong fundamentals.

Schwab US Dividend Equity ETF (SCHD - Free Report) – Yield 2.93%

The underlying Dow Jones U.S. Dividend 100 Index is designed to measure the performance of high dividend-yielding stocks issued by U.S. companies that have a record of consistently paying out dividends, selected for fundamental strength relative to their peers, based on financial ratios.

Cboe Vest S&P 500 Dividend Aristocrats Target Income ETF (KNG - Free Report) – Yield 3.61%

The underlying Cboe S&P 500 Dividend Aristocrat Target Income Index Monthly Series is designed to track the performance of a hypothetical buy-write strategy on optionable constituents of the S&P 500 Dividend Aristocrat Index.

Legg Mason Low Volatility High Dividend ETF (LVHD - Free Report) – Yield 3.71%

The underlying QS Low Volatility High Dividend Index provides stable income through investment in stocks of profitable U.S. companies with relatively high dividend yields, lower price and earnings volatility.

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