QDF features a heavy cyclical tilt, which can be a positive trait in advance of higher U.S. interest rates. The financial services, technology and consumer discretionary sectors combine for nearly half of the ETF’s weight. Conversely, QDF’s exposure to the rate-sensitive telecom and utilities sectors is relatively modest as is the fund’s allocations to the downtrodden energy and materials groups.
“The result is a portfolio that at a high level doesn’t look all that dissimilar to the S&P 500 but is much cleaner on the inside. The Quality Dividend ETF is currently overweight financials, which could benefit from an impending Fed rate hike, and utilities, an area of the market traditionally more conservative while delivering above average yields. It’s underweight primarily in the healthcare and technology sectors,” adds ETF Daily News.
FlexShares Quality Dividend Index Fund