Market research has revealed that high-quality stocks typically have better risk-adjusted returns compared to lower-quality stocks over time. Additionally, quality stocks typically reflect the companies’ competitive advantage, or economic moat, in their respective markets.
Looking ahead, a rising interest rate environment may have a smaller impact on these ETFs as they have a small exposure to rate-sensitive utilities sector stocks. Specifically, NOBL shows a 1.8% tilt toward utilities and EFAD has a 9.8% weight in the sector.
Both ETFs are heavily allocated toward other defensive sectors, with NOBL showing a 39% position in consumer staples and EFAD including a 21.8% position in healthcare and 21.7% in consumer staples.
Financial advisors who are interested in learning more about investing dividend ETF strategies can register for the Tuesday, October 7 webcast here.