DLN tracks the WisdomTree LargeCap Dividend Index (WLTDI) and more than half the members of that index also have higher yields than 10-year Treasuries. An index dividend yield of just under 2.7% is not jaw-dropping, but DLN offers advantages of its own.
Not only is the ETF home to one of the safest groups of dividend payers in terms of consistency, sustainability and potential dividend growth going forward, but the fund offers a value proposition with financials, energy and industrials combining for over 34% of the fund’s weight.
Apple (NasdaqGS: AAPL) and Microsoft, two of the largest dividend growers on a percentage basis among U.S. mega-caps, are DLN’s largest and third-largest holdings. 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]
Both DHS and DLN pay monthly dividends.
WisdomTree Equity Income Fund
Tom Lydon’s clients own shares of Apple, Microsoft and Procter & Gamble.