While RDIV does not follow the dividend increase methodology made popular by other dividend ETFs like VIG, eight of the new ETF’s top 10 holdings grew their dividend distributions on an annualized basis from 2007 to 2012, while 60% of all index constituents increased their dividend distributions over the same period.
Not surprisingly, RDIV is heavily allocated to high-yield sectors such as consumer staples, telecom and utilities. While those sectors have been preferred destinations for conservative income investors over the years, the recent tapering-induced spike in Treasury yields exposed those sectors as vulnerable in rising rate environments. [Dividend ETFs With Growing Yield Potential]
The new ETF has annual fees of 0.49%.
ETF Trends editorial team contributed to this post.