There are a variety of dividend exchange traded funds (ETFs) available however, risk and return objectives vary. Dividend ETFs perform differently since they track indexes from different providers and some may be concentrated in specific industries. The Star Ledger points out that financial stocks are a common holding in dividend funds, and they can be sensitive to interest rates and inflation.
The iShares Dow Jones Select Dividend (DVY) was the first dividend ETF and invests in 100 of the highest yielding dividend securities in the Dow Jones U.S. Total Market Index. It is currently up 2% for the year.
First Trust Morningstar Dividend Leaders (FDL) is relatively new and invests in top dividend companies that show dividend consistency and sustainability. It is also up 2% for the year.
State Street SPDR Dividend (SDY) also another new ETF is up 2% this year. This ETF invests in long-term dividend paying stocks.
For full disclosure, DVY is held in some of Tom Lydon’s managed accounts.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.