Active ETFs can present some strong routes into the market right now, and one standout may be the active dividend ETF TDVG. TDVG, the T. Rowe Price Dividend Growth ETF, is showing strong recent and long-term performance, per VettaFi data. Its combination of growth and dividend exposures in an active wrapper may appeal to investors.
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The active dividend ETF has an average annual return of 9.8% over the last three years, helping the strategy outperform both its ETF Database Category and Factset Segment averages. Over the near term, it has also done well, returning 8.4% over the last three months, helping it outperform, beating its Factset Segment average in that time.
What’s The Strategy?
So, how might investors want to approach the strategy, and what role can it play? TDVG actively invests in firms with good financials and growth potential, as measured by factors like dividend yield and dividend growth potential. Charging 50 basis points (bps), the active dividend ETF provides exposure to firms in a healthy position and able to perform well regardless of the higher rate environment.
The strategy could also benefit from potential rate cuts. Investing in firms with healthy dividend outlooks via an active approach could help identify companies set to take a leap with growth and favorable borrowing rates. Aside from a history of growing dividends, the ETF also looks for firms with solid balance sheets, cash flows, and a competitive advantages.
TDVG’s combination of growth and dividend factors, then, could really make it a standout in 2024. Active ETFs represent a growing segment in the ETF landscape, and an allocation to them could boost otherwise passive portfolios. For those looking to add a strong, active dividend ETF performer, TDVG may merit a closer look.
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