A New Fund-of-Funds ETF to Target Right Dividend Stocks

DHS has a 3.28% 12-month yield. HDV has a 3.54% 12-month yield. SCHD has a 2.79% 12-month yield. SCHV has a 2.67% 12-month yield. VYM has a 3.07% 12-month yield. PFV’s underlying index showed a 2.95% yield as of July 31.

DHS tracks some of the highest yielding dividend stocks, taking securities ranked in the highest 30% by dividend yield. HDV tracks dividend-paying domestic stocks that have been screen for financial health and include those with relatively high dividend yields. SCHV tracks large-cap stocks that exhibit value style characteristics. SCHD includes 100 stocks based on strong fundamentals, dividend yields and consistent dividend payouts for at least 10 consecutive years. Lastly, VYM targets common stocks with high dividend yields.

Potential investors should be aware of their company exposure when investing in these types of fund-of-fund strategies. For instance, investors would be overweight large companies like Microsoft (NasdaqGS: MSFT), AT&T (NYSE: T) and Exxon Mobil (NYSE: XOM) as the five underlying ETFs all count these companies among their top holdings. The largest single stock exposure in PFV’s overall portfolio was 5.2% as of July 31, 2016.

For more information on new fund products, visit our new ETFs category.