Inflationary pressures could push interest rates higher, but they’re still historically low. Investors can mine for higher yields with the Invesco Dow Jones Industrial Average Dividend ETF (DJD) and the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD).
Investors always have the option of choosing individual securities that offer attractive dividends. DJD does the work for them, sifting though the mass of of equities in the Dow Jones Industrial Average to find opportunities.
With a low 0.07% expense ratio, DJD seeks to track the investment results of the Dow Jones Industrial Average Yield Weighted. The underlying index is designed to provide exposure to dividend-paying equity securities of companies included in the Dow Jones Industrial Average, which is a price-weighted index of 30 U.S. companies that meet certain size, listing, and liquidity requirements.
Dividend yields must be consistent. Only securities with regular dividend payments over the previous 12 months are included in the Index.
What about the S&P 500?
For investors looking to segment their dividend-paying opportunities further, there’s SPHD. Given the way the market has been behaving lately, the timing for SPHD couldn’t be more auspicious.
SPHD is ideal in the current market thanks to its low volatility component. While looking for dividend opportunities within the S&P 500, SPHD seeks to mute the ups and downs of the index.
The ETF seeks to track the investment results (before fees and expenses) of the S&P 500® Low Volatility High Dividend Index. The fund generally will invest at least 90% of its total assets in the securities that comprise the underlying index.
The index provider compiles, maintains, and calculates the underlying index, which is composed of 50 securities in the S&P 500 Index that historically have provided high dividend yields with lower volatility. To get a piece of SPHD, ETF investors are looking at a net expense ratio of 0.30%.
“Not surprisingly, SPHD tends to be heavy on utility stocks and light on fast-growing tech companies,” ETF Database analysis noted. “SPHD imposes guardrails that prevent a single sector from dominating the portfolio, with each sector limited to ten stocks and 25% of the portfolio at rebalance. Between rebalances, better-performing sectors can become a bigger slice of the pie. As of March 2020, the fund has 37% of its money in financial stocks.”
For more news and information, visit the Innovative ETFs Channel.