iShares Select Dividend ETF (NASDAQ: DVY)

最新ニュース iShares Select Dividend ETF (NASDAQ:DVY)

iShares Select Dividend ETF

Utilities

Financial Services

Consumer Cyclical

Consumer Defensive

Communication Services

Energy

Healthcare

Basic Materials

Technology

Industrials

The fund generally invests at least 90% of its assets in securities of the underlying index and in depositary receipts representing securities of the underlying index. The underlying index measures the performance of the U.S.s leading stocks by dividend yield.

Altria Group Inc.

At&t, Inc.

Philip Morris International Inc.

Citizens Financial Group Inc.

Truist Financial Corp.

International Paper Co.

Pfizer, Inc.

Verizon Communications, Inc.

Keycorp

Dominion Energy Inc.

iShares Asia / Pacific Dividend 30 Index Fund Exchange Traded Fund

iShares Emerging Markets Dividend Index Fund Exchange Traded Fund

As Trump tariffs take another spin through Mexico and Canada, investors are left navigating an increasingly <a href="https://www.benzinga.com/topic/tariffs">complex trade landscape</a>. 
While the long-term economic impact remains "indeterminate for both the U.S. and others," Sam Rines, macro strategist at WisdomTree, sees this as a pivotal stress test for economies and supply chains that have hardened over the past six years.
<h2 class="wp-block-heading">Mexico &amp; Canada: The First To React To Trump Tariffs</h2>
In a <a href="https://www.benzinga.com/government/regulations/25/02/43440692/us-mexico-agrees-on-one-month-tariffs-pause-stocks-rebound-peso-rallies">swift diplomatic maneuver</a>, Mexico and the U.S. have reached what Rines calls "a détente of sorts." It may not be a full-fledged trade agreement, but it's enough of a political win for Trump to delay and reassess.
Canada has also<a href="https://www.benzinga.com/25/02/43450261/trump-trudeau-strike-border-security-deal-tariffs-on-canada-paused-for-at-least-30-days"> reached a temporary agreement</a> with the U.S., while the EU is bracing for its turn in the trade spotlight. Interestingly, "India (and others) are not being mentioned in the same context," a nod to Prime Minister Narendra Modi's past alignment with Donald Trump.
Read Also: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/25/02/43432736/copper-stocks-on-shaky-ground-jpmorgan-analysts-say-tariffs-deepseek-cloud-outlook">Copper Stocks On Shaky Ground, JPMorgan Analysts Say: Tariffs, DeepSeek Cloud Outlook</a>
<h2 class="wp-block-heading">Dividend Payers Take Center Stage</h2>
So, who benefits from a protracted tariff skirmish? "The winners in a prolonged trade and tariff skirmish are U.S. domestically focused businesses," Rines notes, pointing to value stocks with limited exposure to trade volatility.
Dividend payers stand out as particularly "attractive," with Rines emphasizing their resilience over buyback-heavy firms. Those companies prioritizing stable income distribution are likely to emerge as the "biggest winners."
<h2 class="wp-block-heading">ETFs To Watch</h2>
For US investors looking to capitalize, ETFs such as the Vanguard Dividend Appreciation ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VIG#NYSE">VIG</a>), iShares Select Dividend ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/DVY#NASDAQ">DVY</a>), the WisdomTree U.S. High Dividend Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DHS#NYSE">DHS</a>) and the WisdomTree U.S. Quality Dividend Growth Fund (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/DGRW#NASDAQ">DGRW</a>) could offer exposure to resilient, dividend-paying U.S. firms. 
Those betting on an America-first trade boom might look at Schwab U.S. Dividend Equity ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SCHD#NYSE">SCHD</a>) for companies committed to consistent payouts.
Rines leaves no doubt that this turbulence is far from over: "America First economic policies are seizing the attention of the markets… this is not going to abate in the near future and neither will the consequent volatility." Investors should buckle up, as the tariff rollercoaster shows no signs of slowing.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/government/regulations/25/02/43437906/constellation-brands-most-exposed-name-as-trump-tariffs-go-live-analysts-advise-adjusting-prices">Constellation Brands &#8216;Most Exposed Name&#8217; As Trump Tariffs Go Live: Analysts Advise Adjusting Prices</a></li>
</ul>
Photo: Chip Somodevilla/Shutterstock.com

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Dividend Stocks Could Be 'Biggest Winners' As Trump's Trade Moves Shake Markets: WisdomTree Expert

With <a href="https://www.benzinga.com/topic/interest-rates">ultra-low interest rates</a> firmly in the rearview mirror, Jeff Weniger, Head of Equity Strategy at WisdomTree, has a clear message for investors: &#8220;Anything in the high-4s on a 10-year Treasury rate puts the S&amp;P 500's earnings yield at a level where it either barely exceeds or does not exceed the risk-free yield.&#8221;
In other words, it&#8217;s time to rethink the Growth vs. Value debate.
In an exclusive interview with Benzinga, Weniger said that investors in the "higher for longer" camp should focus on Value stocks. ETFs such as the Vanguard Value ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VTV#NYSE">VTV</a>), the SPDR Select Sector Fund &#8211; Energy (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>), the Vanguard Small-Cap Value ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VBR#NYSE">VBR</a>) and the iShares Select Dividend ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/DVY#NASDAQ">DVY</a>) provide exposure to value equity in the U.S.
Read Also: <a href="https://www.benzinga.com/25/01/43059744/exclusive-can-sp-500-repeat-large-gains-from-donald-trumps-first-term-a-second-time-around-readers-say-this-return-range-most-likely" target="_blank" rel="noreferrer noopener">EXCLUSIVE: Can S&amp;P 500 Repeat Large Gains From Donald Trump&#8217;s First Term A Second Time Around? Readers Say This Return Range Most Likely</a>
As rates rise, the yields on Treasury bonds become more competitive with stock market earnings, making growth stocks, which have long outperformed, much less attractive. In such a scenario, investors in growth-focused ETFs such as the Invesco QQQ Trust, Series 1 (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) and the Vanguard Growth ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VUG#NYSE">VUG</a>) should remain wary of their holdings.
"In that scenario, which is a live one, investors need to reassess the more speculative portions of their portfolio," he said.
<h2 class="wp-block-heading">Tariff Tension &amp; Its Surprising Impact</h2>
While tariffs continue to be a topic of concern, Weniger suggests that much of this risk is already baked into the market. &#8220;Tariff risk is one of the most priced-in risks we have seen for some time,&#8221; he explained.
Reshoring efforts, which began during the pandemic, are unlikely to be significantly affected by new tariffs. So, if you&#8217;re expecting a major tariff shock to upend the market, Weniger believes the impact may be much smaller than anticipated.
<h2 class="wp-block-heading">Inflation's Hidden Risks: Housing Edition</h2>
Beyond energy prices, Weniger identifies a potentially overlooked inflation risk: housing. &#8220;The market needs to contend with the very real arithmetic of Owners Equivalent Rent in the CPI calculation,&#8221; he said.
Even if home prices stagnate or fall, the inflated housing costs will continue to push the CPI higher.
<h2 class="wp-block-heading">Navigating Market Sentiment</h2>
With macro uncertainties looming, Weniger advises investors to manage their risk carefully. &#8220;Sentiment is arguably bubbly in certain pockets of U.S. markets and downright moribund in others,&#8221; he adds, suggesting that international stocks might be a safer bet while scaling back exposure to U.S. equities in the current volatile climate.
The Vanguard FTSE Developed Markets ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VEA#NYSE">VEA</a>), the iShares Core MSCI EAFE ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/IEFA#BATS">IEFA</a>) and the WisdomTree International Hedged Quality Dividend Growth Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IHDG#NYSE">IHDG</a>) provide exposure to international equity.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/government/regulations/25/01/43083803/market-bets-on-trumps-tariff-announcement-plummet-dollar-falls-whats-going-on">Market Bets On Trump&#8217;s Tariff Announcement Plummet, Dollar Falls: What&#8217;s Going On?</a></li>
</ul>
Image created using artificial intelligenc via Midjourney.

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EXCLUSIVE: 'Higher For Longer' Interest Rates Shift Investors To Value, Tariff Fears Overstated, Says WisdomTree Expert

Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the iShares Select Dividend ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/dvy#NASDAQ">DVY</a>) is a passively managed exchange traded fund launched on 11/03/2003.
The fund is sponsored by Blackrock (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/blk#NYSE">BLK</a>). It has amassed assets over $17.87 billion, making it one of the largest ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
Investors should also pay attention to an ETF&#39;s expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.38%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.84%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund&#39;s holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Utilities sector--about 28.50% of the portfolio. Financials and Consumer Staples round out the top three.
Looking at individual holdings, Altria Group Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/mo#NYSE">MO</a>) accounts for about 2.94% of total assets, followed by AT&amp;T Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/t#NYSE">T</a>) and Verizon Communications Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vz#NYSE">VZ</a>).
The top 10 holdings account for about 18.21% of total assets under management.
Performance and Risk
DVY seeks to match the performance of the Dow Jones U.S. Select Dividend Index before fees and expenses. The Dow Jones U.S. Select Dividend Index measures the performance of a selected group of equity securities issued by companies that have provided relatively high dividend yields on a consistent basis over time.
The ETF has added roughly 3.56% so far this year and was up about 8.57% in the last one year (as of 06/18/2024). In the past 52-week period, it has traded between $102.97 and $125.75.
The ETF has a beta of 0.88 and standard deviation of 15.82% for the trailing three-year period, making it a medium risk choice in the space. With about 107 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Select Dividend ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, DVY is a reasonable option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 1000 Value ETF (ARCA:IWD) and the Vanguard Value ETF (ARCA:VTV) track a similar index. While iShares Russell 1000 Value ETF has $54.76 billion in assets, Vanguard Value ETF has $116.20 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
<a href="https://www.zacks.com/stock/news/2289562/should-ishares-select-dividend-etf-dvy-be-on-your-investing-radar?cid=CS-BENZ-FT-style_box_etf-2289562">To read this article on Zacks.com click here.</a>

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Should iShares Select Dividend ETF Be on Your Investing Radar?

By James Early, BBAE Chief Investment Officer
Are Dividend stocks a good investment? Maybe Not
At least that&rsquo;s what the data show this year: As I type, the S&amp;P 500 is up 9.4%, yet the iShares Select Dividend ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dvy#NYSE">DVY</a>) is down 9.4%. (The S&amp;P 500 equal-weight index splits the difference at -0.43%.)
But you might have been a moron to not invest in dividend stocks overall.
<h2>Why Dividend Stocks Outperform</h2>
A Financial Times chart, using data from Ned Davis Research and Hartford Funds, showed the growth of $100 invested in 1973 until February of 2021. Specifically:&nbsp;
<ul>
<li>
$100 grew to $4,744 if invested in an equal-weighted S&amp;P 500 index
</li>
<li>
$100 grew to $8,942 if invested in dividend-paying stocks generally
</li>
<li>
$100 grew to $14,405 if invested in dividend raisers or initiators
</li>
</ul>
Morgan Housel noted that $1,000 invested in 1957 would have grown to $176,000 by 2006 in the S&amp;P 500. But a strategy buying the 10 highest-yielders in the S&amp;P 500 would have left you with $1,300,000.&nbsp;
I could go on with data supporting dividend investing. For 10 years, I ran what was probably the largest dividend advisory service in the world (and for five years, advised a similar service in London) and I was lucky to beat the market. Here&rsquo;s an old audit report (although my picks were public anyway):
<img alt="captura_de_pantalla_2023-05-31_230833.png" src="https://www.benzinga.com/files/u165461/captura_de_pantalla_2023-05-31_230833.png" style="height:621px; width:619px" />
I penned a recent piece in Forbes, and also <a href="https://www.bbae.com/blog/article/high-interest-rate-investing-bbaes-latest-forbes-piece">walked through some key charts on the BBAE website</a> (I highly recommend you take a look at the last chart) about investing during high interest rates &ndash; and where rates go from here.
I&rsquo;ll spare you a long article and say it directly: We&rsquo;ve come through 12 or 13 of the most atypical periods ever for US equity markets. Uber-low rates pumped up the present values of unprofitable companies that weren&rsquo;t projected to have earnings or cash flows until far into the future (<a href="https://www.bbae.com/blog/article/did-rising-rates-kill-silicon-valley-bank">see the table at the bottom of this article for a visual</a>).
Those days are over.&nbsp;
Sure, we&rsquo;ve got an AI boom at the moment. My prediction is that, as with most booms, we&rsquo;ll see a few big winners and a lot of losers &ndash; both on the company and investor level. <a href="https://www.bbae.com/blog/article/ai-dont-believe-the-hype">As I noted here, that&rsquo;s how booms</a> pretty much always end up.
AI isn&rsquo;t an all-in portfolio strategy anyway.
If, roughly speaking, you&rsquo;re younger than your mid-30s, you&rsquo;ve probably only known a bull market, at least until 2022 came along. That&rsquo;s not your fault. But if history is a guide &ndash; and the &ldquo;this time is different&rdquo; crowd has a long-term accuracy rate rounding to 0% &ndash; the next 5, 10, 15 or more years will be the era of further advances in AI and other new technologies against a backdrop of a more skeptical, cash flow-focused market.&nbsp;
I&rsquo;m not telling you to avoid growth stocks. I&rsquo;m just suggesting that a barbell approach of adding a conservative allocation &ndash; specifically, to dividend stocks &ndash; could create a nice counterweight in portfolios dominated by Tesla, AI, SaaS, cannabis, or whatever&rsquo;s looked hot in recent years.
<h2>Three Dividend Stocks to Buy Now</h2>
Ok, I&rsquo;m not really telling you to buy these stocks now, or even to buy them per se. You should make your own choices. They could be great for some people, and less great for others.&nbsp;
<ol>
<li>
iShares Select Dividend ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dvy#NYSE">DVY</a>). It doesn&rsquo;t have to be this dividend ETF &ndash; there are more than 100 others &ndash; but this one has a reasonable-but-not-cheap 0.38% expense ratio, and an also-reasonable 107 holdings. Its trailing yield is almost 4% (that&rsquo;s high!), its P/E is a very reasonable 11 &ndash; less than half the S&amp;P 500&rsquo;s current P/E ratio of 24 &ndash; and its beta of 0.74 indicates that it&rsquo;s a bit &ldquo;safer&rdquo; than the market (well, beta loosely equates to safety, but it&rsquo;s technically covariance with the market, which definitionally has a beta of 1).
</li>
<li>
Diageo (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/deo#NYSE">DEO</a>). With a 2% yield, Diageo may not impress dividend hardballs, but its premium alcohol brands like Johnnie Walker, Guinness, Captain Morgan (fun fact: I used to have facial hair like Captain Morgan), Tanqueray, Bailey&rsquo;s, Smirnoff, and more impress consumers, especially in developing markets where status symbol purchases are in high demand. Globally, booze sales are growing faster than GDP, and revenue from Diageo&rsquo;s super-premium segment has been growing by more than 20% per year. Diageo&rsquo;s ROIC (return on invested capital; basically, the financial sine qua non of a business) is consistently in the mid-teens (thus nicely above any realistic cost of capital), and its operating profits are projected to grow by 6% to 9% per year through 2025. All good stuff. Diageo is what I call a &ldquo;no thesis&rdquo; company &ndash; it&rsquo;s built strong brands and essentially just has to keep doing what it&rsquo;s been doing to do well. Success doesn&rsquo;t hinge on regulatory approval, Phase 3 trial results, or some other singular catalyst. With some swills requiring 15 years to age, it&rsquo;s not as if aspiring entrants can spring up and quickly challenge Diageo, at least in aged liquor segments, to boot.
</li>
<li>
Unilever (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ul#NYSE">UL</a>). You can&rsquo;t make everything for everybody, but you can try, and Unilever comes close. I&rsquo;m partial to their Fabio ads for I Can&rsquo;t Believe It&rsquo;s Not Butter! but this 3.4% yielder is so much more, with more than 400 brands including Vaseline, Dove soap, Q-tips (I shove them daily into my ears, warnings be damned), Hellman&rsquo;s Mayonnaise, the Axe body spray so beloved of teenage boys, and more. A full 58% of sales are to emerging markets, and Unilever sells in 190 out of the globe&rsquo;s 195 countries (Syria, United Arab Emirates, and Yemen are among the holdouts; I&rsquo;m still trying to find the others). Beauty is 42% of Unilever&rsquo;s revenue, food is 38%, and home care is 20%. The catalyst here &ndash; and if you&rsquo;ve seen Unilever&rsquo;s languishing stock price, you&rsquo;re wondering what the catalyst is &ndash; is that activist investor Nelson Peltz joined the board and CEO Alan Jope will retire after 2023. Procter &amp; Gamble (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pg#NYSE">PG</a>) is a similar company whose stock price was similarly languishing until new management came along &ndash; then it took off. This could be Unilever&rsquo;s P&amp;G moment.
</li>
</ol>
&nbsp;
Neither James nor BBAE has an investment position in any of the securities mentioned in this article.&nbsp;
Imagen de&nbsp;<a href="https://pixabay.com/es/users/publicdomainpictures-14/?utm_source=link-attribution&amp;utm_medium=referral&amp;utm_campaign=image&amp;utm_content=163509">PublicDomainPictures</a>&nbsp;en&nbsp;<a href="https://pixabay.com/es//?utm_source=link-attribution&amp;utm_medium=referral&amp;utm_campaign=image&amp;utm_content=163509">Pixabay</a>

You Need Dividend Stocks Now. Here's Why – and Here Are 3

By James Early, BBAE Chief Investment Officer
You&rsquo;d be a moron to invest in dividend stocks.
At least that&rsquo;s what the data show this year: As I type, the S&amp;P 500 is up 9.4%, yet the iShares Select Dividend ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dvy#NYSE">DVY</a>) is down 9.4%. (The S&amp;P 500 equal-weight index splits the difference at -0.43%.)
But you might have been a moron to not invest in dividend stocks overall.
<h2>Why Dividend Stocks Outperform</h2>
A Financial Times chart, using data from Ned Davis Research and Hartford Funds, showed the growth of $100 invested in 1973 until February of 2021. Specifically:&nbsp;
<ul>
<li>
$100 grew to $4,744 if invested in an equal-weighted S&amp;P 500 index
</li>
<li>
$100 grew to $8,942 if invested in dividend-paying stocks generally
</li>
<li>
$100 grew to $14,405 if invested in dividend raisers or initiators
</li>
</ul>
Morgan Housel noted that $1,000 invested in 1957 would have grown to $176,000 by 2006 in the S&amp;P 500. But a strategy buying the 10 highest-yielders in the S&amp;P 500 would have left you with $1,300,000.&nbsp;
I could go on with data supporting dividend investing. For 10 years, I ran what was probably the largest dividend advisory service in the world (and for five years, advised a similar service in London) and I was lucky to beat the market. Here&rsquo;s an old audit report (although my picks were public anyway):
<img alt="captura_de_pantalla_2023-05-31_230833.png" src="https://www.benzinga.com/files/u165461/captura_de_pantalla_2023-05-31_230833.png" style="height:621px; width:619px" />
I penned a recent piece in Forbes, and also <a href="https://www.bbae.com/blog/article/high-interest-rate-investing-bbaes-latest-forbes-piece">walked through some key charts on the BBAE website</a> (I highly recommend you take a look at the last chart) about investing during high interest rates &ndash; and where rates go from here.
I&rsquo;ll spare you a long article and say it directly: We&rsquo;ve come through 12 or 13 of the most atypical periods ever for US equity markets. Uber-low rates pumped up the present values of unprofitable companies that weren&rsquo;t projected to have earnings or cash flows until far into the future (<a href="https://www.bbae.com/blog/article/did-rising-rates-kill-silicon-valley-bank">see the table at the bottom of this article for a visual</a>).
Those days are over.&nbsp;
Sure, we&rsquo;ve got an AI boom at the moment. My prediction is that, as with most booms, we&rsquo;ll see a few big winners and a lot of losers &ndash; both on the company and investor level. <a href="https://www.bbae.com/blog/article/ai-dont-believe-the-hype">As I noted here, that&rsquo;s how booms</a> pretty much always end up.
AI isn&rsquo;t an all-in portfolio strategy anyway.
If, roughly speaking, you&rsquo;re younger than your mid-30s, you&rsquo;ve probably only known a bull market, at least until 2022 came along. That&rsquo;s not your fault. But if history is a guide &ndash; and the &ldquo;this time is different&rdquo; crowd has a long-term accuracy rate rounding to 0% &ndash; the next 5, 10, 15 or more years will be the era of further advances in AI and other new technologies against a backdrop of a more skeptical, cash flow-focused market.&nbsp;
I&rsquo;m not telling you to avoid growth stocks. I&rsquo;m just suggesting that a barbell approach of adding a conservative allocation &ndash; specifically, to dividend stocks &ndash; could create a nice counterweight in portfolios dominated by Tesla, AI, SaaS, cannabis, or whatever&rsquo;s looked hot in recent years.
<h2>Three Dividend Stocks to Buy Now</h2>
Ok, I&rsquo;m not really telling you to buy these stocks now, or even to buy them per se. You should make your own choices. They could be great for some people, and less great for others.&nbsp;
<ol>
<li>
iShares Select Dividend ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dvy#NYSE">DVY</a>). It doesn&rsquo;t have to be this dividend ETF &ndash; there are more than 100 others &ndash; but this one has a reasonable-but-not-cheap 0.38% expense ratio, and an also-reasonable 107 holdings. Its trailing yield is almost 4% (that&rsquo;s high!), its P/E is a very reasonable 11 &ndash; less than half the S&amp;P 500&rsquo;s current P/E ratio of 24 &ndash; and its beta of 0.74 indicates that it&rsquo;s a bit &ldquo;safer&rdquo; than the market (well, beta loosely equates to safety, but it&rsquo;s technically covariance with the market, which definitionally has a beta of 1).
</li>
<li>
Diageo (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/deo#NYSE">DEO</a>). With a 2% yield, Diageo may not impress dividend hardballs, but its premium alcohol brands like Johnnie Walker, Guinness, Captain Morgan (fun fact: I used to have facial hair like Captain Morgan), Tanqueray, Bailey&rsquo;s, Smirnoff, and more impress consumers, especially in developing markets where status symbol purchases are in high demand. Globally, booze sales are growing faster than GDP, and revenue from Diageo&rsquo;s super-premium segment has been growing by more than 20% per year. Diageo&rsquo;s ROIC (return on invested capital; basically, the financial sine qua non of a business) is consistently in the mid-teens (thus nicely above any realistic cost of capital), and its operating profits are projected to grow by 6% to 9% per year through 2025. All good stuff. Diageo is what I call a &ldquo;no thesis&rdquo; company &ndash; it&rsquo;s built strong brands and essentially just has to keep doing what it&rsquo;s been doing to do well. Success doesn&rsquo;t hinge on regulatory approval, Phase 3 trial results, or some other singular catalyst. With some swills requiring 15 years to age, it&rsquo;s not as if aspiring entrants can spring up and quickly challenge Diageo, at least in aged liquor segments, to boot.
</li>
<li>
Unilever (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ul#NYSE">UL</a>). You can&rsquo;t make everything for everybody, but you can try, and Unilever comes close. I&rsquo;m partial to their Fabio ads for I Can&rsquo;t Believe It&rsquo;s Not Butter! but this 3.4% yielder is so much more, with more than 400 brands including Vaseline, Dove soap, Q-tips (I shove them daily into my ears, warnings be damned), Hellman&rsquo;s Mayonnaise, the Axe body spray so beloved of teenage boys, and more. A full 58% of sales are to emerging markets, and Unilever sells in 190 out of the globe&rsquo;s 195 countries (Syria, United Arab Emirates, and Yemen are among the holdouts; I&rsquo;m still trying to find the others). Beauty is 42% of Unilever&rsquo;s revenue, food is 38%, and home care is 20%. The catalyst here &ndash; and if you&rsquo;ve seen Unilever&rsquo;s languishing stock price, you&rsquo;re wondering what the catalyst is &ndash; is that activist investor Nelson Peltz joined the board and CEO Alan Jope will retire after 2023. Procter &amp; Gamble (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pg#NYSE">PG</a>) is a similar company whose stock price was similarly languishing until new management came along &ndash; then it took off. This could be Unilever&rsquo;s P&amp;G moment.
</li>
</ol>
&nbsp;
Neither James nor BBAE has an investment position in any of the securities mentioned in this article.&nbsp;
Imagen de&nbsp;<a href="https://pixabay.com/es/users/publicdomainpictures-14/?utm_source=link-attribution&amp;utm_medium=referral&amp;utm_campaign=image&amp;utm_content=163509">PublicDomainPictures</a>&nbsp;en&nbsp;<a href="https://pixabay.com/es//?utm_source=link-attribution&amp;utm_medium=referral&amp;utm_campaign=image&amp;utm_content=163509">Pixabay</a>

A good ETF strategy will depend on your investment goals, risk tolerance, and time horizon. However, here are a few general principles to keep in mind when developing an ETF strategy:
Index-based strategy: This strategy involves investing in ETFs that track a specific index, such as the S&amp;P 500 or the Nasdaq 100. The advantage of this strategy is that it provides broad market exposure with low expense ratios. By investing in index-based ETFs, you can gain exposure to the overall performance of the stock market, without having to select individual stocks. Index-based ETFs are typically designed to provide a diversified portfolio of stocks that represent a particular market or industry sector.
<ul>
<li>SPDR S&amp;P 500 ETF Trust (ARCA: SPY): This ETF tracks the S&amp;P 500 index, which is a benchmark of 500 large-cap US stocks. Year-to-date, the ETF has had a return of around 9% (as of April 2023).</li>
<li>iShares Russell 2000 ETF (ARCA: IWM): This ETF tracks the Russell 2000 index, which is a benchmark of 2,000 small-cap US stocks. Year-to-date, the ETF has had a return of around 11% (as of April 2023).</li>
</ul>
Sector-based strategy: This strategy involves investing in ETFs that track a specific sector, such as technology, healthcare, or energy. This can be a good way to gain targeted exposure to specific industries. Sector-based ETFs allow investors to invest in specific areas of the market that they believe will perform well in the future. This can be a good way to diversify your portfolio and potentially increase your returns. However, sector-based ETFs can be riskier than index-based ETFs because they are concentrated in a specific sector.
<ul>
<li>Technology Select Sector SPDR Fund (ARCA: XLK): This ETF tracks the technology sector of the S&amp;P 500 index, which includes companies such as Apple, Microsoft, and Facebook. Year-to-date, the ETF has had a return of around 8% (as of April 2023).</li>
<li>Health Care Select Sector SPDR Fund (ARCA: XLV)): This ETF tracks the healthcare sector of the S&amp;P 500 index, which includes companies such as Johnson &amp; Johnson and Pfizer. Year-to-date, the ETF has had a return of around 10% (as of April 2023).</li>
</ul>
Dividend-based strategy: This strategy involves investing in ETFs that focus on high dividend-paying stocks. This can be a good way to generate regular income from your investments. Dividend-based ETFs provide exposure to stocks that have a history of paying high dividends to their shareholders. These stocks are typically well-established, financially stable companies with a long history of consistent dividends. Dividend-based ETFs can provide investors with a source of steady income, which can be particularly useful in retirement.
<ul>
<li>iShares Select Dividend ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/dvy#NASDAQ">DVY</a>): This ETF tracks the performance of US stocks that have a history of consistently paying high dividends. Year-to-date, the ETF has had a return of around 12% (as of April 2023).</li>
<li>SPDR S&amp;P Dividend ETF (ARCA: SDY): This ETF tracks the performance of US stocks that have a history of consistently paying dividends. Year-to-date, the ETF has had a return of around 11% (as of April 2023).</li>
</ul>
International strategy: This strategy involves investing in ETFs that provide exposure to international markets, such as emerging markets or developed markets outside of the US. This can be a good way to diversify your portfolio globally. International ETFs allow investors to invest in markets outside of the US. This can provide diversification benefits and potentially higher returns, as foreign markets can sometimes outperform US markets. However, investing in international markets can also expose investors to currency risk and political risk.
<ul>
<li>iShares MSCI EAFE ETF (ARCA: EFA): This ETF tracks the performance of developed market stocks outside of North America, including companies in Europe, Asia, and Australia. Year-to-date, the ETF has had a return of around 8% (as of April 2023).</li>
<li>iShares MSCI Emerging Markets ETF (ARCA: EEM): This ETF tracks the performance of emerging market stocks, including companies in China, India, and Brazil. Year-to-date, the ETF has had a return of around 3% (as of April 2023).</li>
</ul>
Bond-based strategy: This strategy involves investing in ETFs that track a specific bond market, such as US Treasury bonds or corporate bonds. This can be a good way to generate fixed income with low risk. Bond-based ETFs invest in a portfolio of bonds, which provide a fixed rate of return to investors. This can be particularly useful for investors who are looking for a low-risk investment that provides a regular stream of income. Bond-based ETFs can also help to diversify a portfolio, as they are typically less volatile than stocks.
<ul>
<li>iShares Core US Aggregate Bond ETF (ARCA: AGG): This ETF tracks the performance of the US investment-grade bond market. Year-to-date, the ETF has had a return of around 2% (as of April 2023).</li>
<li>Vanguard Total Bond Market ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/bnd#NASDAQ">BND</a>): This ETF tracks the performance of the US investment-grade bond market. Year-to-date, the ETF has had a return of around 1% (as of April 2023).</li>
</ul>

Investment Strategies For Exchange Traded Funds (ETFs) & Funds You Should Consider

On CNBC&rsquo;s &ldquo;Halftime Report Final Trades,&rdquo; Stephanie Link of Hightower said Halliburton Company (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/hal#NYSE">HAL</a>) &ldquo;had a great quarter&rdquo; and &ldquo;their margins are going on higher.&rdquo; Although the &ldquo;stock was up a lot,&rdquo; it is a good time to take advantage of the 7% pullback over <a href="https://www.benzinga.com/news/earnings/22/07/28121014/halliburton-ceo-jeff-miller-expects-greater-demand-for-oil-drilling-in-domestic-and-international-m">the past two weeks, she stated</a>.
JPMorgan Private Bank&rsquo;s Anastasia Amoroso chose iShares Select Dividend ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/dvy#NASDAQ">DVY</a>) saying dividend-paying stocks can &ldquo;compete with cash at 4.3% yield.&rdquo; The ETF gives exposure to pharmaceuticals, broader healthcare staples and energy, she added.
Check out other stocks making moves in the <a href="https://www.benzinga.com/premarket/">premarket</a>.
Jim Lebenthal of Cerity Partners said that Kinder Morgan Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/kmi#NYSE">KMI</a>) was &ldquo;yielding 6.1%&rdquo; with a &ldquo;nice and fat and growing&rdquo; EBIT.
Josh&nbsp;Brown of Ritholtz Wealth Management said Restaurant Brands International Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/qsr#NYSE">QSR</a>) was &ldquo;breaking out&rdquo; under the new CEO.
Now Read:&nbsp;<a href="https://www.benzinga.com/general/gaming/22/11/29836094/facebooks-human-level-ai-gamer-can-beat-you-at-diplomacy-using-negotiation-skills">Facebook&#39;s &#39;Human-Level&#39; AI Gamer Can Beat You At &#39;Diplomacy&#39; Using Negotiation Skills</a>

Small Cap

Media

Halliburton, Kinder Morgan, And A Basket Of Dividend-Payers On CNBC's 'Final Trades'

Steve Chiavarone of Federated Hermes said on <a href="https://www.cnbc.com/video/2021/05/25/dividend-stocks-outperform-this-month-two-traders-share-their-outlook.html">CNBC&#39;s &quot;Trading Nation&quot;</a> that dividend stocks outperformed the S&amp;P 500 on annual basis just as much as the growth stocks outperformed value in the prior year.
iShares Select Dividend ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/dvy#NASDAQ">DVY</a>) is as cheap versus bonds or as cheap versus stocks as it has been in the last 20 years, he added. It&#39;s trading at an 8 to 10 multiple discount to the S&amp;P 500 and Chiavarone thinks dividend stocks have a long way to run here.
Danielle Shay of Simpler Trading said it&#39;s a great time to invest in dividend stocks and she wants to buy Brookfield Renewable Corp (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/bepc#NYSE">BEPC</a>). She doesn&#39;t expect to see the strength in the S&amp;P 500 that we saw last year so she thinks it&#39;s a great time to search for dividend stocks.

BEPC

'Trading Nation' Traders Share Their Thoughts On Dividend Stocks

Ten-year Treasury yields closed at a paltry 1.49% on Tuesday, so it&#39;s not particularly surprising some investors are clamoring for high dividend strategies and doing so with exchange traded funds.
<h3>What Happened</h3>
Four of the 10 largest domestic dividend ETFs are yield-based strategies and while each of those funds are trailing the S&amp;P 500 on a year-to-date basis, all four offer higher dividend yields than the benchmark U.S. equity gauge and each has some defensive positioning that could prove useful if markets continue faltering.
Year to date, the Vanguard High Dividend Yield ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vym#NYSE">VYM</a>) and the iShares Core High Dividend ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/hdv#NYSE">HDV</a>) are each up about 10%, putting them atop the yield-based dividend ETF field.
&ldquo;Four of the ten largest U.S. dividend ETFs can be considered dividend-yield oriented. These ETFs offer 12-month yields above 3% and have relatively high exposure in defensive sectors,&rdquo; said <a href="https://newpublic.cfraresearch.com/">CFRA Research</a> Director of ETF &amp; Mutual Fund Research Todd Rosenbluth in a note out Tuesday.
<h3>Why It&#39;s Important</h3>
The $7 billion HDV, which tracks the Morningstar Dividend Yield Focus Index, holds 75 stocks and has a trailing 12-month yield of 3.26%.
HDV&#39;s 10.27% year-to-date gain is arguably impressive when noting the fund devotes over 40% of its combined weight to energy and healthcare stocks. Those are two of this year&#39;s worst-performing sectors.
For investors looking to skirt the risks associated with the energy patch while still maintaining yield exposure, the iShares Select Dividend ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dvy#NYSE">DVY</a>) makes sense. That ETF is also up about 10% this year, but is more traditional in its yield approach as it allocates 27% of its weight to the utilities sector. That makes DVY positively correlated to declining interest rates while driving a trailing 12-month yield of 3.36%.
<h3>What&#39;s Next</h3>
&ldquo;DVY holds only 102 securities that have paid dividends for the last five years and have a sufficiently strong earnings-to-dividend-per-share coverage ratio,&rdquo; said Rosenbluth.
That&#39;s an important consideration with high dividend strategies because some high-yield stocks are burdened by their dividends and could cut or suspend those payouts.
CFRA has Overweight&nbsp;ratings on each of the ETFs mentioned here. Over the past three years, DVY and HDV have been the least volatile of the four big yield-based ETFs.
Related Links:
<a href="https://www.benzinga.com/trading-ideas/long-ideas/19/08/14330212/dont-bark-at-the-pet-care-etf">A Promising Pet Care ETF</a>
<a href="https://www.benzinga.com/news/19/08/14330208/more-problems-emerge-for-this-health-care-etf">Headwinds Hinder This Healthcare ETF</a>

Talking About Yield With Dividend ETFs

Growth stocks have left value stocks in the dust throughout most of the 10-year bull market, and that trend has continued so far in 2019. The market tide will eventually turn back to value investing, however, and traders will need to know when to pivot their strategies.
<h3>A Simple Explanation</h3>
Year to date, popular growth fund&nbsp;ETF PowerShares QQQ Trust, Series 1 (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/qqq#NASDAQ">QQQ</a>) is up 15.6 percent, while the value-oriented iShares Select Dividend ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dvy#NYSE">DVY</a>) is up just 9.4 percent. DataTrek Research co-founder Nicholas Colas said Wednesday there&rsquo;s a simple explanation for why growth is beating value and it can also give traders two areas to watch for potential strategy shifts.
The largest allocation of S&amp;P 500 growth stocks is to the technology sector at about 25 percent. Value stocks, on the other hand, are skewed almost as strongly to the Financial sector at 21 percent allocation. Small-cap value stocks are skewed even more heavily toward the Financial sector at 24 percent.
Colas says he is often asked when will be a good time to start investing in value stocks over growth stocks.
&ldquo;Our answer based on what has happened over both the last 12 months and just 2019 is simply &lsquo;when Financials start to work and, for Large Caps, when Tech underperforms,&rsquo;&rdquo; Colas wrote in a report.
<h3>All About Tech</h3>
So far in 2019, the Financial Select Sector SPDR Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xlf#NYSE">XLF</a>) is up 7.1 percent while the Technology Select Sector SPDR Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xlk#NYSE">XLK</a>) has more than doubled that return with a 17.8 percent gain.
From a historical standpoint, Colas says the shift in outperformance from growth to value stocks tends to happen near the bottom of an economic cycle, such as the ones in 2002-2003 and 2009.
&ldquo;Since we are not near that point just yet, the safe bet remains Growth,&rdquo; he wrote.
<h3>More Of The Same</h3>
While there will certainly be outliers among financial stocks and value stocks in the near-term, Colas said it&rsquo;s not a good idea to expect value stocks to make a comeback anytime soon.
In the meantime, traders can be watching for signs of a slowdown in the technology sector and/or signs that the financial sector has come back to life. Either or both of these indicators may be a signal that a much larger shift in investor sentiment is taking place and that value stocks will once again be in vogue after roughly a decade of underperformance.
Related Links:
<a href="https://www.benzinga.com/general/education/18/08/12204520/what-is-the-buffett-indicator">What Is The Buffett Indicator?</a>
<a href="https://www.benzinga.com/analyst-ratings/analyst-color/19/01/12895830/robert-kricheff-discusses-changing-valuation-models-in-">Robert Kricheff Discusses Changing Valuation Models In New Book &#39;That Doesn&#39;t Work Anymore&#39;</a>

Sector ETFs

2 Signals That It's Time To Shift From Growth Stocks To Value Stocks

Last year was a mixed bag for dividend-oriented exchange traded funds. Dividend growth was <a href="https://www.benzinga.com/trading-ideas/long-ideas/19/01/12931707/dividends-eclipsed-more-records-in-2018-even-as-etfs-fell">again solid in the United States</a>, but high dividend strategies languished as the Federal Reserve hiked interest rates four times.
The iShares Select Dividend ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/dvy#NASDAQ">DVY</a>), one of the largest domestic dividend ETFs, slipped 6.3 percent last year, including dividends paid. That loss exceeds the 4.6 percent shed by the S&amp;P 500.
<h3>What Happened</h3>
The $16.94 billion DVY targets the Dow Jones U.S. Select Dividend Index and holds nearly 100 stocks. While the ETF&#39;s 2018 performance confirms its vulnerabilities to rising interest rate, the sector rotation seen late last year could benefit defensive strategies, such as DVY.
&ldquo;In the fourth quarter of 2018, investors rotated away from more growth-oriented sectors, including Information Technology, and into more defensive sectors such as Consumer Staples and Utilities,&rdquo; said <a href="https://newpublic.cfraresearch.com/">CFRA Research</a> Director of ETF &amp; Mutual Fund Research Todd Rosenbluth in a note out Tuesday. &ldquo;The S&amp;P 500 Tech sector&rsquo;s dividend yield was a below-average 1.5% at yearend, but consumer staples (3.1%) and utilities (3.5%) were two of the three highest-yielding sectors.&rdquo;
<h3>Why It&#39;s Important</h3>
DVY has a trailing 12-month dividend yield of 3.31 percent, or 130 basis points above the S&amp;P 500&#39;s dividend yield. Underscoring its defensive posture, DVY&#39;s three-year standard deviation <a href="https://www.ishares.com/us/products/239500/?referrer=tickerSearch">of 7.49 percent</a> is well below those found on broader domestic equity benchmarks.
DVY is a yield-weighted strategy, but its components must have minimum dividend increase streaks of five years. The fund devotes over 32 percent of its weight to the utilities sector while consumer discretionary and energy stocks combine for 23.76 percent of DVY&#39;s roster. None of DVY&#39;s components exceed weights of 2.17 percent, indicating single-stock risk is limited within the fund.
<h3>What&#39;s Next</h3>
&ldquo;Investors added $8.3 billion to dividend-focused ETFs in the final quarter, after removing $3.1 billion in the first nine months of the year,&rdquo; said Rosenbluth. &ldquo;These ETFs provide exposure to multiple sectors, providing diversification benefits. Fourth-quarter dividend increases occurred in sectors that sport below-average and above-average yields.&rdquo;
Investors added $1.24 billion to DVY in the fourth quarter. CFRA has an Overweight rating on the iShares ETF.
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<a href="https://www.benzinga.com/trading-ideas/long-ideas/19/01/12947454/putting-private-equity-on-your-side-with-an-etf">How To Play Private Equity </a>
<a href="https://www.benzinga.com/analyst-ratings/analyst-color/19/01/12947445/this-transportation-etf-could-benefit-from-air-freight-">Trying Transportation ETFs</a>

Why This Defensive Dividend ETF Could Rise Again

The S&amp;P 500 closed lower on an annual basis in 2018, weighing on dividend exchange traded funds in the process, but it was still a good year for dividend growth.
S&amp;P 500 dividends hit a record $14.19 per share on a quarterly basis, or $119.80 billion. The SPDR S&amp;P 500 ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/spy#NYSE">SPY</a>), the world&#39;s largest ETF, has a trailing <a href="https://us.spdrs.com/en/etf/spdr-sp-500-etf-SPY">12-month dividend yield </a>of 2.04 percent.
<h3>What Happened</h3>
With the Federal Reserve having raised interest rates four times in 2018, it&#39;s unsurprising that some dividend stocks and ETFs struggled. The upside to that scenario is that some companies may have been compelled to boost dividends to compete with the higher yields offered by less risky U.S. government debt.
The &ldquo;average Q4 2018 dividend increase in the S&amp;P 500 was 10.24 percent, down from 10.41 percent&nbsp;during Q4 2017; 2018 average is 13.48 percent, up from 2017&rsquo;s 11.36 percent,&rdquo; <a href="http://www.indexologyblog.com/">according to S&amp;P Dow Jones Indices</a>.
Last year, the aggregate dividend increase was slightly off 2017&#39;s level, but so were dividend cuts.
&ldquo;For Q4 2018, aggregate increases amounted to $11.9 billion, down from Q4 2017&rsquo;s $12.4 billion,&rdquo; said S&amp;P Dow Jones. &ldquo;Aggregate dividend cuts decreased to $4.5 billion from $7.9 billion for Q4 2017.&rdquo;
<h3>Why It&#39;s Important</h3>
Amid 2018&#39;s backdrop of rising interest rates, dividend growth ETFs fared less poorly than their high dividend counterparts. The Vanguard Dividend Appreciation ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vig#NYSE">VIG</a>) and the SPDR S&amp;P Dividend ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/sdy#NYSE">SDY</a>) posted an average loss of 2.4&nbsp;percent last year.
VIG requires member firms to have dividend increase streaks of at least a decade, while SDY components must have dividend increase streaks of <a href="https://us.spdrs.com/en/etf/spdr-sp-dividend-etf-SDY">at least 20 years</a>.
Conversely, the Vanguard High Dividend ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vym#NYSE">VYM</a>) and the iShares Select Dividend ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/dvy#NASDAQ">DVY</a>) &mdash; both high dividend strategies &mdash; posted an average annual decline of about 6 percent last year.
High dividend ETFs could find some support this year if the Federal Reserve slows its pace of rate hikes or if investors embrace defensive sectors&nbsp;such as consumer staples and utilities. Utilities stocks account for nearly a third of DVY&#39;s weight.
<h3>What&#39;s Next</h3>
The stage is set for more dividend growth in 2019.
&ldquo;Based on their current payout policies, S&amp;P 500 2019 dividends already have a 3.5-percent&nbsp;tailwind built in, setting the stage for potentially another record year, with the increase again expected to outpace wage growth and inflation,&rdquo; said Howard Silverblatt, senior index analyst at S&amp;P Dow Jones Indices.
Related Links:
<a href="https://www.benzinga.com/analyst-ratings/analyst-color/19/01/12922150/it-may-be-time-to-look-at-this-etf-of-etfs">This ETF Could Be Ready To Soar</a>
<a href="https://www.benzinga.com/trading-ideas/long-ideas/19/01/12922130/a-decent-outlook-for-consumer-discretionary-etfs">Consumer Cyclical ETFs Could Perk Up</a>

Dividends Eclipsed More Records In 2018 Even As ETFs Fell

Volatility and uncertainty surrounding global economic growth and rising yields have made investors defensive. This has increased the appeal for products that provide safety and stability in a rocky market.
Dividend-focused products offer both safety in the form of payouts and stability in the form of mature companies that are less volatile to the large swings in stock prices. The dividend-paying securities are the major sources of consistent income for investors when returns from equity markets are at risk. Further, these products are proven outperformers over the long-term.
While there are plenty of options in the dividend ETF world, honing in on the &quot;dividend aristocrats&quot;&nbsp;could be the most beneficial way to ride out the current market volatility, resulting from political and geopolitical worries.<iframe allow="autoplay; encrypted-media" frameborder="0" height="315" src="https://www.youtube.com/embed/GpC1-r4xYsQ?rel=0" width="560"></iframe>
<h3>Why Dividend Aristocrats?</h3>
Dividend aristocrats are&nbsp;blue-chip dividend-paying companies, which have a long history of raising dividend payments each year. These generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis. Additionally, aristocrats tend to skew the portfolio to less volatile sectors and mature companies.
Investors should note that the dividend aristocrat funds offer more dividend growth opportunities when compared to the other products in the space but might not necessarily have the highest yields. Further, these products lead to a healthy portfolio with a greater scope of capital appreciation as opposed to simple dividend paying stocks or those with high yields.
As a result, these products provide a nice combination of annual dividend growth and capital appreciation opportunity and are mainly suitable for risk adverse long-term investors. For them, we have highlighted some popular ETFs that could be excellent choices:
Vanguard Dividend Appreciation ETF&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/vig#NASDAQ">VIG</a>)
This is the largest and most-popular ETF in the dividend space with AUM of $28.9 billion and average daily volume of about 596,000 shares. The fund follows the NASDAQ US Dividend Achievers Select Index, which is composed of high quality stocks that have a record of raising dividend every year. It holds 182 securities in the basket, with none accounting for more than 4.5% share. The fund charges 8 bps in annual fees.
iShares Select Dividend ETF&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/dvy#NASDAQ">DVY</a>)
This fund provides exposure to the companies with a consistent 5-year history of dividend payments. It follows the Dow Jones U.S. Select Dividend Index and holds 98 securities in its basket with each accounting for less than 2.6% of assets. The ETF has AUM of $16.7 billion and average daily volume of more than 489,000 shares. It charges 39 bps in fees per year from investors.
SPDR S&amp;P Dividend ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/sdy#NYSE">SDY</a>)&nbsp;
With AUM of $15.4 billion and average daily volume of 377,000 shares, this fund provides a well-diversified exposure to 111 U.S. stocks that have been consistently increasing their dividends every year for at least 20 years. This can be done by tracking the S&amp;P High Yield Dividend Aristocrats Index. Each firm accounts for less than 2.5% of assets. The fund charges 35 bps in fees.
Schwab U.S. Dividend Equity ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/schd#NYSE">SCHD</a>)
With AUM of $7.8 billion, this product offers exposure to 108 high-dividend yielding U.S. companies that have a record of consistent dividend payments supported by fundamental strength based on financial ratios and ample liquidity. This can be easily done by tracking the Dow Jones U.S. Dividend 100 Index. The fund is well spread across components, with none holding more than 4.8% of assets. It charges 7 bps in annual fees and trades in solid volume of around 758,000 shares a day.
Related Links:
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<a href="https://www.benzinga.com/trading-ideas/long-ideas/18/03/11429074/a-new-aristocrats-etf-with-added-income">A New Aristocrats ETF With Added Income</a>

An Investors' Guide To Dividend Aristocrat ETFs

The Federal Open Market Committee meets this week, and many bond market participants expect the Fed to raise interest rates after having done so three times in 2017.
Expectations of higher borrowing costs have previously been seen as detrimental to dividend stocks and exchange traded funds, but that tide could be turning if last week&#39;s ETF inflows paint an accurate picture. Each of the top 10 asset-gathering ETFs for the trading week ended March 16 were equity funds, and three of those products were dividend funds.
The iShares Select Dividend ETF (NASDAQ: <a class="ticker" href="/stock/dvy#NASDAQ">DVY</a>) added $3.54 billion in new assets last week, good for the second-best total among all U.S.-listed ETFs.
<h3>
	The DVY Surprise</h3>
Against the backdrop of rising interest rates, it is perhaps surprising that DVY would be the top asset gatherer among dividend ETFs. With last week&#39;s haul, DVY has added $2.97 billion in new assets this year, tops among all dividend ETFs and good for the sixth-best total among all ETFs.
DVY, which tracks the Dow Jones U.S. Select Dividend Index, holds 97 stocks, <a href="https://www.ishares.com/us/products/239500/?referrer=tickerSearch">over 26 percent </a>of which hail from the rate-sensitive utilities sector. As the Fed boosted borrowing costs three times last year, DVY trailed the S&amp;P 500 and suffered outflows of $848.5 million.
While DVY allocates almost 15 percent of its weight to financial services stocks, a sector believed to benefit from higher interest rates, it&#39;s not nearly enough to offset its utilities exposure. The utilities sector is already reflecting the specter of multiple interest rate increases this year as the Utilities Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>), the largest ETF tracking the sector, is down 4.5 percent year-to-date.
<h3>
	Other Prolific Asset Gatherers</h3>
Last week, the Schwab U.S. Dividend Equity ETF (NYSE: <a class="ticker" href="/stock/schd#NYSE">SCHD</a>) and the Vanguard Dividend Appreciation ETF (NYSE: <a class="ticker" href="/stock/vig#NYSE">VIG</a>) also packed on the assets. Investors added $2.33 billion to SCHD and $1.89 billion to VIG. That sent SCHD&#39;s year-to-date inflows to $2.72 billion, putting it just behind DVY on the list of 2018&#39;s top 10 asset-gathering ETFs.
Neither SCHD nor VIG feature large utilities weights. For example, VIG, the largest U.S. dividend ETF by assets, has utilities exposure <a href="https://personal.vanguard.com/us/funds/snapshot?FundId=0920&amp;FundIntExt=INT&amp;funds_disable_redirect=true#tab=2">of just 1.5 percent</a> compared with its largest sector exposure of 34 percent to industrials.
SCHD devotes just 5.3 percent to utilities stocks, making that the ETF&#39;s third-smallest sector weight. The ETF&#39;s largest sector allocation is 20.5 percent to financial services.
Related Links:
<a href="https://www.benzinga.com/trading-ideas/long-ideas/18/03/11371538/the-temptation-of-technology-etfs">Tempting Tech ETFs</a>
<a href="https://www.benzinga.com/trading-ideas/long-ideas/18/03/11363674/mlp-etfs-endure-rough-first-quarter-global-x-says-new-tax-ru">A Rough Patch For MLP ETFs</a>

Investors Renew Affinity For Dividend ETFs

Among older dividend exchange-traded funds, the usual strategies are to focus on high-yield dividend payers or those companies displaying favorable payout growth trends. High dividend stocks often hail from sectors, such as consumer staples, telecommunications and utilities, implying that these name are favored when Treasury yields are falling.
On the other hand, dividend growers are favored for their quality traits and, of course, those steadily rising payouts. The SPDR S&amp;P Dividend ETF (NYSE: <a class="ticker" href="/stock/sdy#NYSE">SDY</a>) is one of the oldest and largest U.S. dividend ETFs and some of that success is attributable to a methodology that focuses on steady dividend growers.
SDY turns 13 later this year and has nearly $15.4 billion in assets under management. The ETF tracks the S&amp;P High Yield Dividend Aristocrats Index, which mandates that member firms have dividend increase streaks of at least 20 years.
<h3>
	Advantages Of Dividend Growers</h3>
&ldquo;Dividend growers, which tend to be higher quality companies, have generally shown greater resilience in unsteady markets and could address concerns about dividend stocks in a rising-rate environment, to some extent,&rdquo; <a href="http:// http://www.indexologyblog.com/2018/02/12/a-case-for-dividend-growth-strategies-part-1/">said S&amp;P Dow Jones Indices</a>.
SDY allocates just 12.8 percent of its weight to the utilities sector. By comparison, the iShares Select Dividend ETF (NASDAQ: <a class="ticker" href="/stock/dvy#NASDAQ">DVY</a>), a yield-driven strategy, devotes more than 26 percent of its weight to utilities. Over the past three years, SDY has outperformed DVY by 300 basis points, including dividends paid.
For the six years spanning 2012 through 2017, SDY outperformed DVY in four of those six years. SDY yields 2.32 percent, 40 basis points above the dividend yield on the S&amp;P 500.
<h3>
	Not Just 20 Years</h3>
As was noted earlier, SDY&#39;s underlying index requires 20 consecutive years of dividend increases, but many of its components go well beyond that requirement.
&ldquo;While the hurdle for index inclusion is 20 straight years of increasing dividends, the index average is 35.9 years,&rdquo; said S&amp;P Dow Jones. &ldquo;Additionally, there are eight constituents with over 55 consecutive years of dividend increases. This impressive consistency suggests a certain amount of financial strength and discipline, which may provide some downside protection in turbulent markets.&rdquo;
Historical data indicate SDY&#39;s index tops the broader market when stocks swoon. From the end of 1999 through the end of 2017, the 15 worst months for the S&amp;P Composite 1500 resulted in average declines of 8.93 percent, but SDY&#39;s index fell an average of 5.85 percent in those months, according to S&amp;P Dow Jones data.
Related Links:
<a href="https://www.benzinga.com/analyst-ratings/analyst-color/18/02/11174263/finding-opportunity-in-steel-etfs">Sturdy Steel ETFs</a>
<a href="https://www.benzinga.com/analyst-ratings/analyst-color/18/02/11174259/utilities-slump-could-be-nearing-its-end">Utilities Slump Is Close to Over</a>

An ETF With A Long-Term Dividend Strategy

High-dividend exchange traded funds struggled against the broader market last year. Just look at the iShares Select Dividend ETF (NASDAQ: <a class="ticker" href="/stock/dvy#NASDAQ">DVY</a>), one of the largest such funds. DVY trailed the S&amp;P 500 by almost 700 basis points in 2017.
Several of the S&amp;P 500&#39;s highest-yielding sectors were also among the worst-performing groups in the benchmark U.S. equity gauge last year.
At year&#39;s end, 83 percent of S&amp;P 500 constituents paid a dividend, with the dividend payers yielding 2.2 percent, above the broader index&#39;s 1.9 percent average,&rdquo; <a href="https://newpublic.cfraresearch.com/">CFRA Research</a> Director of ETF &amp; Mutual Fund Research Todd Rosenbluth said in a note. &ldquo;The highest-yielding sectors for the S&amp;P 500 were telecom services (5.1 percent), utilities (3.4 percent), real estate (3.3 percent), energy (2.7 percent) and consumer staples (2.7 percent).&rdquo;
<h3>
	Depending On Dividends</h3>
While 2017 was not a banner year for some dividend ETFs, historical data indicate dividends are an integral part of total returns. For nearly three decades, the S&amp;P 500 has averaged annualized returns of 9.8 percent, with 31 percent of that figure attributable to dividends, according to CFRA.
DVY, which has nearly $18 billion in assets, allocates nearly 37 percent of its combined weight to utilities and energy stocks, explaining the ETF&#39;s 2017 struggles. Energy was the worst-performing sector in the S&amp;P 500 last year, while utilities finished the year in a tailspin and on the brink of correction territory.
DVY is dividend-weighted and its nearly 100 components are required to have paid a dividend for at least the past five years, but many of the fund&#39;s holdings have dividend increase streaks far longer than that.
<h3>
	Another Idea</h3>
The PowerShares S&amp;P 500 High Dividend Low Volatility Portfolio(NYSE: <a class="ticker" href="/stock/sphd#NYSE">SPHD</a>) is another idea for income investors to consider. SPHD holds the 50 S&amp;P 500 stocks with the lowest trailing 12-month volatility and highest dividend yields. That gives the ETF a combined weight of 40 percent to the real estate and utilities sectors, in part explaining why the fund returned just 12 percent last year.
The $3-billion SPHD has a 12-month distribution rate of 3.14 percent and could be worth a look if value stocks rebound, as nearly two-thirds of SPHD components are considered value plays. SPHD pays a monthly dividend.
CFRA has Overweight ratings on DVY and SPHD.
Related Links:
<a href="https://www.benzinga.com/analyst-ratings/analyst-color/18/01/11005457/this-value-etf-gained-22-in-2017">An Impressive Value ETF</a>
<a href="https://www.benzinga.com/trading-ideas/long-ideas/18/01/10998077/finding-shareholder-rewards-in-a-small-cap-etf">A Rewarding Small-Cap ETF</a>
Todd Shriber owns shares of SPHD.

SPHD

High-Yield Dividend ETFs: 2018 Could Be Better

All eyes are on the Federal Reserve this week with many fixed income traders indicating the first rate hike of 2017 is all but a done deal. Higher interest rates could affect a wide array of income-generating asset classes and sectors, including some dividend exchange traded funds.
Some dividend ETFs feature heavy allocations to higher-yielding sectors, such as consumer staples and utilities. Given the bond-like qualities of those groups, particularly utilities, ETFs with large weights to those sectors can be <a href="https://www.benzinga.com/analyst-ratings/analyst-color/16/06/8076757/its-getting-pricey-to-chase-yield">vulnerable to higher interest rates</a>.
&ldquo;Since 1953, whenever the yield on the S&amp;P 500 index was within one percentage point of the yield on the 10-year Treasury, as it currently is, the S&amp;P 500 rose in price an average of 11% in the following 12 months, and had positive results 77% of the time, according to Sam Stovall, chief investment strategist at CFRA,&rdquo; said <a href="http://cfraresearch.com/">CFRA Research</a> in a note out Monday.
Home to $17.1 billion in assets under management, the iShares Select Dividend ETF (NYSE: <a class="ticker" href="/stock/dvy#NYSE">DVY</a>) is one of the largest U.S. dividend ETFs. DVY&#39;s trailing 12-month yield of 2.92 percent isn&#39;t alarmingly high, but the ETF&#39;s 28.5 percent weight to utilities stocks, by far its largest sector allocation, could be a cause for concern.
DVY &ldquo;has shed $302 million in assets to start 2017. DVY focuses on companies with a five-year record of paying dividends and a relatively high yield. Relative to the S&amp;P 500 index, the ETF is significantly overweighted to defensive utilities (28 percent vs. 3 percent),&rdquo; said CFRA.
The Vanguard High Yield Dividend ETF (NYSE: <a class="ticker" href="/stock/vym#NYSE">VYM</a>) clearly advertises itself as a high dividend ETF, but a trailing 12-month yield of 2.8 percent might indicate otherwise. Additionally, for a high yield strategy, VYM&#39;s utilities weight is relatively low at just 7.8 percent.
VYM &ldquo;experienced $393 million of net outflows year to date. VYM has a comparable 2.8 percent yield, but the sector exposure is distinct from DVY&rsquo;s. The overweighting to utilities (8 percent) is more muted, but exposure to AT&amp;T (NYSE: <a class="ticker" href="/stock/t#NYSE">T</a>) and other telecom services (5 percent) is higher,&rdquo; said CFRA.
CFRA has a Market Weight rating on DVY and an Overweight rating on VYM. Over the past three years, DVY is up 40.6 percent, while VYM is higher by 38.9 percent.

Federal Reserve

How The Fed Can Affect These Dividend ETFs

<a href="http://thereformedbroker.com/2016/07/05/chart-o-the-day-the-chicken-bull/">The Reformed Broker</a>&rsquo;s Josh Brown believes he has figured out what is driving the S&amp;P 500 to new all-time highs: fear.
According to Brown, the fact that minimum volatility, high-dividend and defensive sectors are the top-performers in 2016 shows that buyers are extremely risk-averse at the moment. Brown calls these traders &ldquo;chicken bulls&rdquo; because they want to own stocks, but are avoiding the risk of momentum stocks and small caps.
<img alt="" src="/files/u81483/chicken-bull.png" style="width: 480px; height: 133px;" />
&ldquo;I&rsquo;ve read every major book about market history ever written, and I&rsquo;m wracking my brain to come up with another example of this, but I can&rsquo;t,&rdquo; Brown wrote.
&ldquo;We may be witnessing the first-ever bull market in stocks driven predominantly by fear of stocks.&quot;
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/16/07/8208530/the-s-p-500s-new-all-time-high-just-doesnt-feel-right-an">The S&amp;P 500&#39;s New All-Time High Just Doesn&#39;t Feel Right, And That&#39;s OK</a></bzrelatedlink>
Traders seem well aware that the market has been churning higher, but they are also aware of its relatively high historical valuation. However, with bond yields around the world near zero, or even in negative territory, limited investment options may be driving traders to buy U.S. stocks at a time they normally wouldn&#39;t be buying. If many stock buyers aren&#39;t particularly enthusiastic, it&rsquo;s easy to see why buyers would be looking for the lowest-risk options.
So far this year, the iShares Select Dividend ETF (NYSE: <a class="ticker" href="/stock/dvy#NYSE">DVY</a>) is up 15.5 percent, while the SPDR S&amp;P 500 ETF Trust (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>) is up only 5.4 percent.
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Disclosure: The author holds no position in the stocks mentioned.

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