A Yield-Generating ETF That Adapted to Changes in the Dividend Landscape

Nevertheless, some investors still need fixed-income investments and the demand for income is not going away any time soon.

“People still need to look at strategies in the dividend space, and they’re going to have to peel back the onion a bit because the traditional ones have been loaded with a lot of these bond-like stocks,” Mazza added.

As an alternative way for income seekers to generate yield, one may look at something like the Oppenheimer Ultra Dividend Revenue ETF (NYSEArca: RDIV). RDIV is up 7% year-to-date, making it one of the best-performing dividend ETFs this year. RDIV also shows a 5.03% 12-month yield.

RDIV’s revenue-weighted methodology can help investors avoid expensive stocks and tap into the value factor at a time when some market observers are betting value stocks are poised to rally.

Revenue weighting could provide diversified exposure to the market, is not influenced by stock price, reflects a truer indication of a company’s value and offers stable sector exposure. Moreover, revenue weighting may provide a more value-oriented portfolio and historically outperformed in a value-driven market while showing lower drawdowns during growth-driven markets.

RDIV “invests in the securities in the S&P 900 with the highest trailing dividend yield. Each of these securities is then weighted by top line revenue, instead of market capitalization,” according to OppenheimerFunds.

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