Not only has DGRW outperformed the other dividend ETFs mentioned here since Nov. 1, the fund has brought in $8 million. DGRW’s yield may not sound like much, but the new ETF (May debut), offers advantages in a rising rate environment.
Notably, almost 61% of the fund’s weight is allocated the technology, industrial and consumer discretionary sectors, three of the best-performing sectors when rates rise. Additionally, technology and discretionary have been among the leaders in U.S. dividend growth over the past several years. [Nine New Dividend ETFs With Staying Power]
Speaking of tech dividends, the First Trust NASDAQ Technology Dividend Index Fund (NasdaqGS: TDIV) has also traded slightly higher and seen some inflows since the start of November.
“With the majority of TDIV’s allocations outside interest-rate-sensitive equity themes, its constituents aren’t as dependent on debt issuance as other income sectors. Investors may ultimately be better positioned to endure a rise in long-term interest rates, without borrowing costs eating into profitability,” writes Jacobs.
Microsoft (NasdaqGM: MSFT) and Apple (NasdaqGM: AAPL) combine for 17% of TDIV’s weight. Another dividend fund that has risen in both price and assets since Nov. 1 is the Cambria Shareholder Yield ETF (NYSEArca: SYLD).
SYLD represents a new twist on dividend ETFs because the fund does not focus solely on payouts. While constituent companies must pay cash dividends, they must also be repurchasers of their own shares and show evidence of trimming their debt. The methodology is working as SYLD is up almost 14% in the past six months. [Faber Discusses New Shareholder Yield ETF]
Cambria Shareholder Yield ETF
