VIG has built a loyal following not just because of its focus on dividend increase streaks, but also because of its emphasis on quality names, many of which have low payout ratios. That trait highlights the safety and viability of the dividends paid by VIG’s constituents. [ETFs With Safe Dividends]
The $1.8 billion WisdomTree LargeCap Dividend Fund (NYSEArca: DLN) is another payout ETF that scores well on the dividend safety metric. Like VIG, DLN is a credible avenue to dividend growth, but the fund does not emphasize dividend increase streaks.
Rather, DLN’s underlying index, the WisdomTree LargeCap Dividend Index (WTLDI), weights its almost 300 components based on projected dividends for the coming year.
That gives DLN ample exposure to tried and true dividend sectors such as consumer staples and health care (a combined 26% of the ETF’s weight) as well as future sources of potentially big dividend growth. For example, technology, financial services and consumer discretionary stocks combine for nearly 40% of DLN’s weight and those have been three of the fastest-growing dividend sectors in recent years. [Microsoft Helps a Bunch of ETFs]
WisdomTree LargeCap Dividend Fund