Additionally, QDEF includes companies with an overall beta that is between 0.5 to 1.0 times that of the parent index. The low beta component may be more suitable for more conservative investors who want less exposure to market volatility, but QDEF has a lower 3.10% 12-month yield.
While not exactly small, these quality dividend ETFs do show relatively low trading activity, so potential investors may want to take precautions to better execute trades.
On the upcoming webcast, The Secret to ETF Trading: Understanding ETF Liquidity, Edward A. Rosenberg, Senior VP and Head of ETF Capital Markets & Analytics at Northern Trust Asset Management, will also dive into how ETFs work and the best practices for executing efficient trades.
For instance, despite low activity in the ETF, advisors may consider an ETF’s true liquidity, or the overall liquidity of the underlying holdings as a better indicator. Financial advisors may work with market makers to execute trades in less active ETFs to diminish their impact on market prices.
Financial advisors who are interested in learning more about best practices for trading ETFs can register for the Thursday, February 18 webcast here.