RDVY’s allure comes from the fact that it is heavily tilted sources of future dividend growth. Technology and financial services, two of the leading sources of S&P 500 dividend growth in recent years, are RDVY’s two largest sector weights, combining for 42% of the fund’s weight. Those sectors are often scantly represented in dividend ETFs that focus solely increase streaks.
Holdings from those sectors in RDVY include Cisco (NasdaqGM: CSCO), Oracle (NYSE: ORCL) and BlackRock (NYSE: BLK).
Although RDVY is a new ETF, investors should note some dividend indices from NASDAQ OMX Global Indexes have long track records. VIG tracks one of those indices.
The Dividend Achiever Index family had an impressive 2013, with the NASDAQ US Broad Dividend Achievers Index returning over 26% in 2013. In addition, the NASDAQ US Dividend Achievers Select Index, which is comprised of a select group of securities with at least ten consecutive years of increasing annual regular dividend payments, rose over 29%. Finally, the NASDAQ US Dividend Achievers 50 Index, the narrowest of the three indexes, returned over 31% in 2013, according to NASDAQ OMX Global Indexes. [Dividend Achievers Indices Shine in 2013]
RDVY Sector Weights
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of Cisco and Coca-Cola.