HDV tracks the Morningstar Dividend Yield Focus Index, which is comprised of the 75 highest-yielding companies that meet Morningstar’s quality and financial health standards. The annualized performance difference, or tracking error, between HDV and its index has been 0.5%, according to issuer data.
HDV’s top-10 holdings include eight members of the Dow Jones Industrial Average with Wells Fargo (NYSE: WFC) and Philip Morris (NYSE: PM) the outliers. Although HDV is framed as a yield play, the ETF does expose investors to consistent dividend growth. [Big Dividend Growth With ETFs]
For example, Johnson & Johnson (NYSE: JNJ), Procter & Gamble (NYSE: PG) and Coca-Cola (NYSE: KO) combine for about 17% of the ETF’s weight and those companies of have three of the longest dividend increase streaks among U.S. dividend payers.
Bolstered by utilities’ status as the top-performing S&P 500 sector this year, HDV is up 8.4% compared to a 4% gain for VIG and a 7.2% gain for the Vanguard High Dividend Yield ETF (NYSEArca: VYM).
iShares Core High Dividend ETF