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Another strong performing dividend growth ETF CFRA favors is Vanguard Dividend Appreciation Index Fund (VIG) up 11.1%. Unlike DGRW, VIG focuses on companies with a record of ten consecutive years of dividend increases. While technology (13%) and consumer discretionary (8%) asset exposures are lower than DGRW, industrials exposure (27% vs.19%) is higher.
Meanwhile, VIG stakes in telecom and utilities are minimal (combined 2.2%) and there are no REITs. VIG’s Overweight ranking is aided by holdings including Microsoft (MSFT) and United Technologies (UTX) both with above-average S&P Global Market Intelligence Quality Rankings.
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In contrast, ProShares S&P 500 Dividend Aristocrats (NOBL) and SPDR S&P Dividend (SDY), look at a company’s record of dividend hikes over a period of 25 and 20 years, respectively. As such, they both have much lower technology exposure (2% of assets), as the sector has a shorter history of dividend growth.
Todd Rosenbluth is Director of ETF & Mutual Fund Research at CFRA.