Indeed, buybacks can be viewed as shifty accounting, but an explicit focus on dividends misses the buyback and debt reduction components, according to Cambria, indicating the concept of blending the three virtues as espoused by SYLD can be rewarding.
While SYLD is not a dividend growth ETF, the fund’s three largest sector weights – financial services, consumer discretionary and technology – have been among the largest contributors to S&P 500 dividend growth since the financial crisis. Those sectors combine for 52% of the ETF’s weight. [Inflation Fighting With Dividend Growth ETFs]
SYLD should also prove useful if interest rates rise because of the ETF’s combined 41% weight to the discretionary, technology and industrial sectors – three of the best groups to own in rising rate environments. As it is, this year SYLD has outpaced some of its larger rivals that focus on just dividends or buybacks, not both.
Cambria Shareholder Yield ETF