Rawson points out that the Vanguard dividend ETF emphasizes “companies with a higher quality of earnings,” which makes it tilt toward growth-styled stocks.
VIG has a 1.2% allocation to utilities, whereas utilities is the largest sector weighting in DVY at 30.2%.
“We’re telling investors to put new money into more-diversified dividend funds,” Mr. Flynn of Flynn Zito Capital Management, said in the article. “The market’s sweet spot for dividend-paying stocks seems to be shifting in the direction of funds with lower yields but better growth potential.”
For more information on dividend funds, visit our dividend ETFs category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own DVY.