There are other important, interest rate-related considerations with PFM. Although its trailing 12-month yield of 1.76% is well below the yield on 10-year Treasuries, the ETF’s yield implies safety, a lack of sensitivity of to rising rates and the ability of the fund’s components to continue growing dividends without threatening to alarmingly raise their payout ratios.
Additionally, PFM’s weight to the rate-sensitive telecom and utilities sectors is just 8.3% combined.
Dividend growth, such as that offered by PFM, not only fosters added income and returns, but can also act as an inflation-fighting tool. It also reduces volatility. Over the past 40 years, companies that booste payouts have proven to be less volatile than their counterparts that cut, suspended or did not initiate or raise dividends. [Fight Inflation With Dividend ETFs]
PowerShares Dividend Achievers Portfolio
