“While it appears to offer an attractive yield, it’s reasonable to expect the dividend will be cut,” Rawson said. “Consequently, investors should not expect that this fund’s dividend will grow every year.”
Currently, dividend-paying stocks are back in style as the Federal Reserve maintains a low interest rate environment – the Fed now expects only two interest rate hikes this year, downwardly revised from an expected four hikes. However, when interest rates do begin to rise, dividend stocks may once again fall out of favor because they tend to be slower growing and earnings may not grow fast enough to offset the negative effects of rising rates relative to growth stocks.
DON’s sector allocations include financials 22.1%, consumer discretionary 19.4%, utilities 17.5%, industrials 15.2%, materials 7.7%, information technology 7.2%, energy 3.6%, consumer staples 3.3%, health care 2.0% and telecom 1.9%.
DON shows a 2.62% 12-month yield and a 0.38% expense ratio.
WisdomTree MidCap Dividend Fund