A Familiar Dividend ETF to Revisit

Dividend growth not only fosters added income and returns, but can also act as an inflation-fighting tool. Since the early 1970s, when inflation ran as high as 11% per year, aggregate annual dividends of the S&P 500 have grown more than 1,000%, to $34.99 from $3.16 a share, according to the Wall Street Journal[Fight Inflation With Dividend Growth ETFs]

Due to its light exposure to the utilities sector (just 5.7%), DLN has lagged the utilities-heavy DVY this year as Treasury yields have come in. However, when interest rates do rise, that scenario would likely reverse because DLN allocates over 29% of its combined weight to technology, consumer discretionary and tech, the three best-performing sectors in rising rate environments.

Over the past three years, DLN has outpaced some of its rivals while being less volatile. Plus, DLN pays a monthly dividend. Its rivals mentioned here do not.


Chart Courtesy: ETF Replay