Related: A Smart Beta Bond ETF Idea Worth Considering
While a rise in rates would diminish the attractiveness of dividend stocks with premium valuations and low growth, more high quality dividend payers or the group of dividend growers may stand out. DGRO allocates about half its weight to financial services, healthcare and technology stocks, sectors that have historically performed well as interest rates rise.
Additionally, DGRO’s three-year standard deviation of 9.68% is below that of the S&P 500. Plus, DGRO charges just 0.08% per year, or $8 on a $10,000 investment, making it one the least expensive dividend ETFs.
For more on smart beta ETFs, visit our Smart Beta Channel.