Still, not all dividend ETFs that are delivering solid returns are utilities-heavy. For example, the WisdomTree Total Dividend Fund (NYSEArca: DTD) is up 8.2% this year with just a 6.5% utilities allocation.
The $464.1 million DTD, which like SPHD pays a monthly dividend, is a bet on future sources of dividend growth with a combined 32.4% weight to the financial services and technology sectors. Not only are those of the largest sources of S&P 500 dividend growth over the past several years, those sectors provide a buffer for DTD in the event that interest rates rise.
According to Factset data, at the end of the first quarter the 10 largest dividend payers in the S&P 500 were Exxon Mobil (NYSE: XOM), Apple (NasdaqGS: AAPL), AT&T (NYSE: T), Microsoft (NasdaqGS: MSFT), General Electric (NYSE: GE), Chevron (NYSE: CVX), Johnson & Johnson (NYSE: JNJ), Wells Fargo (NYSE: WFC), Procter & Gamble (NYSE: PG) and Pfizer (NYSE: PFE). Those stocks just happen to comprise DTD’s top-10 holdings. [An ETF for the Largest Dividend Stocks]
DTD charges 0.28% per year and has a distribution yield of 2.5%.
WisdomTree Total Dividend Fund
Tom Lydon’s clients own shares of Apple, Microsoft, P&G and DVY.