Related: Quality Dividend ETFs with Sustainable Yields
HDV’s “energy allocation is nearly three times that of the S&P 500 and, perhaps more concerning, the aforementioned ExxonMobil and Chevron alone account for more than 15% of the portfolio. The sector could be an enticing value play but it’s also still in recovery mode. Oil prices remain volatile and could be forced downward again if the supply/demand balance isn’t restored. I appreciate an overweight in energy right now but I’d prefer it be pared down and diversified among a few more large cap names,” according to a Seeking Alpha analysis of the ETF.
Dividend stocks and related exchange traded funds have been a popular play this year as value investments returned to style. While some may be apprehensive of the category after the recent run up, dividend stocks are only still trading near their historical averages.
HDV “has been and continues to be a solid choice for income seeking investors. While the fund is a high quality holding as is, rotating into some cheaper equity positions and diversifying the portfolio could help keep much of the fund’s risk/return profile and dividend yield intact while adding a more defensive posturing that could shield shareholders from some downside risk,” adds Seeking Alpha.
For more news and strategy on the Dividend ETF market, visit our Dividends category.
iShares Core High Dividend ETF
