FDL is up 4.9% this year, highlighting the ETF’s usefulness in sanguine rate environments. The ETF allocates over 48% of its combined weight to the rate-sensitive utilities and telecom sectors. Two utilities and two telecom stocks are found among FDL’s top-10 holdings. Rising rates do not mean FDL will generate negative returns. The ETF rose nearly 23% last year even as 10-year yields spike. FDL has a 12-month distribution yield of 3.1%. [Dial up This Dividend ETF]
The PowerShares S&P 500 High Dividend Portfolio (NYSEArca: SPHD) is another dividend ETF with ample utilities exposure. SPHD can be viewed has a high yield derivative of SPLV as the former is comprised of the 50 S&P 500 members with the highest yields and lowest volatility.
SPHD features a 26.1% weight to utilities stocks and a trailing 12-month yield of almost 3.4%. That utilities exposure is working in the ETF’s favor as SPHD is 5.4% this year. SPHD has six utilities stocks among its top-10 holdings and pays a monthly dividend.
PowerShares S&P 500 Low Volatility Portfolio
Tom Lydon’s clients own shares of DVY.