iShares Core High Dividend ETF (ARCA: HDV)

最新ニュース iShares Core High Dividend ETF (ARCA:HDV)

iShares Core High Dividend ETF

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The fund generally will invest at least 90% of its assets in the component securities of the underlying index and may invest up to 10% of its assets in certain futures, options and swap contracts, cash and cash equivalents. The underlying index is comprised of qualified income paying securities that are screened for superior company quality and financial health as determined by Morningstar, Inc.s (Morningstar or the index provider) proprietary index methodology. The fund is non-diversified.

Exxonmobil Corp.

Johnson & Johnson

Chevron Corp.

Abbvie Inc Accenture Plc, Class A

Verizon Communications

Philip Morris International Inc.

Coca Cola Co.

Pepsico Inc Sr Unsec

Altria Group Inc Common Stock Usd 0.333

Comcast Corp. Class A

HENDERSON INVTS LTD S/ADR by Henderson Investment Ltd.

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HERALD INVST TR PLC by Herald Investment Trust Plc.

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Health Discovery Corp

As Brent crude and <a href="https://www.benzinga.com/topic/energy">gasoline prices rise</a>, WisdomTree Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WT#NYSE">WT</a>) Head Of Equity Strategy Jeff Weniger is calling it: &#8220;A notable set-up for large-cap value relative to Growth&#8221; is taking shape.
What Happened: Since September, Brent crude has shot up by 12 points. And gasoline prices remained relatively flat year-over-year. Weniger now sees the rise in energy prices as a game-changer for the market. 
Investors should shift focus toward large-cap value stocks — particularly those with exposure to the energy sector, he says.
&#8220;If investors are of the view that crude oil will keep running, this could create a notable set-up for Large Cap Value relative to Growth,&#8221; Weniger told Benzinga in an exclusive interview.
For investors seeking exposure, there are four popular large-cap value equity ETFs in the U.S. to consider:
<ul>
<li>Vanguard Value ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VTV#NYSE">VTV</a>)</li>
<li>Capital Group Dividend Value ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CGDV#NYSE">CGDV</a>),</li>
<li>iShares Core High Dividend ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HDV#NYSE">HDV</a>)</li>
<li>WisdomTree U.S. High Dividend Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DHS#NYSE">DHS</a>) </li>
</ul>
Read Also: <a href="https://www.benzinga.com/economics/macro-economic-events/25/01/43017610/oil-prices-break-80-reach-6-month-highs-despite-israel-hamas-ceasefire-deal-why-is-crude-rallying">Oil Prices Break $80, Reach 6-Month Highs Despite Israel-Hamas Ceasefire Deal: Why Is Crude Rallying?</a>
<h2 class="wp-block-heading">Energy Prices, Sectors, Impact On Growth</h2>
The S&amp;P 500 Value Index (SVX), with 6% of its weight in the energy sector, is in a prime position to benefit from rising oil prices. In contrast, the S&amp;P 500 Growth index, with just 1% exposure to energy, could face headwinds.
&#8220;If the consumer does take a hit from some forthcoming rise in gasoline prices, that could be another headwind for the S&amp;P 500 Growth index,&#8221; Weniger adds.
The Vanguard S&amp;P 500 Growth ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VOOG#NYSE">VOOG</a>) tracks the performance of companies in the S&amp;P 500 Growth Index, just as the iShares S&amp;P 500 Value ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IVE#NYSE">IVE</a>) tracks the performance of companies in the S&amp;P 500 Value Index.
With the consumer spending more at the pump, the S&amp;P 500 Growth index—heavily weighted (16%) in Consumer Discretionary—could feel the pinch, while the Value index, with just 5% in the same sector, remains less exposed. 
The game plan? Look to Large Cap Value stocks with energy exposure as an effective hedge against rising gas prices.
<h2 class="wp-block-heading">Investors Should Take Note</h2>
For those expecting oil to continue its upward trajectory, Weniger's advice is clear: &#8220;Large Cap Value relative to Growth&#8221; could be the play to make in the coming months. 
As gasoline prices climb, those invested in energy-heavy Value stocks may find themselves ahead of the curve.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/25/01/43013634/opecs-optimism-clashes-with-ieas-conservative-2025-oil-growth-projections">OPEC&#8217;s Optimism Clashes With IEA&#8217;s Conservative 2025 Oil Growth Projections</a></li>
</ul>
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EXCLUSIVE: WisdomTree Exec Predicts Energy Prices Will Create 'Notable Set-Up For Large Cap Value Relative To Growth'

According to the daily charts, this <a href="https://www.benzinga.com/etfs">exchange-traded fund</a> with a high dividend yield of 3.67% has been under pressure as it has fallen below its short-term moving averages in the oversold territory.
What Happened: Schwab U.S. Dividend Equity ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SCHD#NYSE">SCHD</a>), which has an expense ratio of 0.06% and pays an annual dividend of $1.05 has declined 3.20% over the last month, as of Monday&#8217;s close. The ETF made its last dividend payment on Dec. 16, for the current year.
From a technical perspective, the analysis of daily moving averages indicates that the ETF may be under pressure in the short term.
The ETF ended at $27.87 apiece on Monday. This was below its eight and 20-day simple moving averages, of $28.30 and $28.82, respectively. As per <a href="https://pro.benzinga.com/dashboard">Benzinga Pro data</a>, its current price was also lower than the 50-day moving average at $28.65.
However, the stock was above its 200-day moving average of $27.15, which implies that it could still be in a long-term uptrend while it is testing fresh support levels near the average value.
This trend combined with a relative strength index of 31.22 could mean that the ETF must be experiencing a bearish short-term trend but a price reversal is possible as it is near the oversold levels.
There is a possibility that the ETF is taking a breather and it could stage a strong comeback. Historically, stocks and other assets often retreat after rising to a crucial level and then bounce back.
<figure class="wp-block-image size-large"><a href="https://pro.benzinga.com/dashboard"><img loading="lazy" decoding="async" width="1024" height="576" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/12/17073739/SCHD-Chart-Tech-1024x576.png" alt="" class="wp-image-695645" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/12/17073739/SCHD-Chart-Tech-1024x576.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/12/17073739/SCHD-Chart-Tech-300x169.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/12/17073739/SCHD-Chart-Tech-768x432.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/12/17073739/SCHD-Chart-Tech-1536x864.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/12/17073739/SCHD-Chart-Tech.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></a></figure>
See Also: <a href="https://www.benzinga.com/analyst-ratings/price-target/24/12/42513306/elon-musks-tesla-nearly-5-times-more-expensive-than-industry-average-stock-surges-over-60-since-election">Elon Musk&#8217;s Tesla Nearly 5 Times More Expensive Than Industry Average: Stock Surges Over 60% Since Election</a>
Why It Matters: When compared to its peers, the Schwab U.S. Dividend Equity ETF has the highest dividend yield for the least amount of expense ratio, <a href="https://www.nasdaq.com/market-activity/etf/schd/dividend-history">according to Nasdaq&#8217;s data</a>.
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Dividend ETFs </td>
<td>Expense Ratio </td>
<td>Dividend Yield </td>
<td>Annual Dividend</td>
</tr>
<tr>
<td>Schwab U.S. Dividend Equity ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SCHD#NYSE">SCHD</a>) </td>
<td>0.06% </td>
<td>3.67% </td>
<td>$1.058</td>
</tr>
<tr>
<td>Vanguard High Dividend Yield Index Fund ETF Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VYM#NYSE">VYM</a>) </td>
<td>0.06% </td>
<td>2.58% </td>
<td>$3.404</td>
</tr>
<tr>
<td>iShares Core Dividend Growth ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DGRO#NYSE">DGRO</a>) </td>
<td>0.08% </td>
<td>2.54% </td>
<td>$1.6123</td>
</tr>
<tr>
<td>iShares Core High Dividend ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HDV#NYSE">HDV</a>) </td>
<td>0.08% </td>
<td>4.23% </td>
<td>$4.9179</td>
</tr>
<tr>
<td>SPDR S&amp;P Dividend ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SDY#NYSE">SDY</a>) </td>
<td>0.35% </td>
<td>2.27% </td>
<td>$3.1408</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption"><a href="https://www.nasdaq.com/market-activity/etf/schd/dividend-history">Source: Nasdaq</a></figcaption></figure>
However, on a year-to-date basis, Schwab U.S. Dividend Equity ETF has the poorest performance when compared to its peers.
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Dividend ETFs </td>
<td>YTD Performance</td>
</tr>
<tr>
<td>Schwab U.S. Dividend Equity ETF</td>
<td>9.04%</td>
</tr>
<tr>
<td>Vanguard High Dividend Yield Index Fund ETF Shares </td>
<td>17.32%</td>
</tr>
<tr>
<td>iShares Core Dividend Growth ETF </td>
<td>17.14%</td>
</tr>
<tr>
<td>iShares Core High Dividend ETF </td>
<td>10.77%</td>
</tr>
<tr>
<td>SPDR S&amp;P Dividend ETF</td>
<td>9.44%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Source: Google Finance</figcaption></figure>
Read Next:
<ul>
<li><a href="https://www.benzinga.com/markets/commodities/24/12/42502069/gold-poised-for-its-best-year-in-a-decade-while-bitcoin-surges-analysts-eye-2025-as-a-golden-era-for-precious-metal-amid-michael-saylors-push-for-btc-as-a-reserve-asset" target="_blank" rel="noreferrer noopener">Gold Poised For Its Best Year In A Decade While Bitcoin Surges: Analysts Eye 2025 As A Golden Era For Precious Metal Amid Michael Saylor's Push For BTC As A Reserve Asset</a></li>
</ul>
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This High Yield Dividend ETF Is Signaling Bearish Trends: Is Trouble Brewing?

The iShares Core High Dividend ETF (ARCA:HDV) was launched on 03/29/2011, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
There are some investors, though, who think it&#39;s possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor &amp; Index
Managed by Blackrock, HDV has amassed assets over $10.15 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. HDV seeks to match the performance of the Morningstar Dividend Yield Focus Index before fees and expenses.
The Morningstar Dividend Yield Focus Index offers exposure to high quality U.S. domiciled companies that have had strong financial health and an ability to sustain above average dividend payouts.
Cost &amp; Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund&#39;s return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.08%.
It has a 12-month trailing dividend yield of 3.54%.
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.
Representing 24.90% of the portfolio, the fund has heaviest allocation to the Energy sector; Consumer Staples and Healthcare round out the top three.
Looking at individual holdings, Exxon Mobil Corp&nbsp;accounts for about 8.21% of total assets, followed by Chevron Corp&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cvx#NYSE">CVX</a>) and Verizon Communications Inc&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vz#NYSE">VZ</a>).
HDV&#39;s top 10 holdings account for about 52.21% of its total assets under management.
Performance and Risk
The ETF has added roughly 7.43% and is up about 12.30% so far this year and in the past one year (as of 07/09/2024), respectively. HDV has traded between $93.77 and $111.68 during this last 52-week period.
The fund has a beta of 0.79 and standard deviation of 13.33% for the trailing three-year period, which makes HDV a medium risk choice in this particular space. With about 81 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Core High Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 1000 Value ETF&nbsp;tracks Russell 1000 Value Index and the Vanguard Value ETF tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $55.66 billion in assets, Vanguard Value ETF has $115.94 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.
<a href="https://www.zacks.com/stock/news/2298259/is-ishares-core-high-dividend-etf-hdv-a-strong-etf-right-now?cid=CS-BENZ-FT-smart_beta_etf-2298259">To read this article on Zacks.com click here.</a>

Is iShares Core High Dividend ETF a Strong ETF Right Now?

Verizon Communications Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VZ#NYSE">VZ</a>) has unveiled a new initiative that extends its best <a href="https://www.benzinga.com/pressreleases/24/05/g39044731/verizon-introduces-the-ultimate-phone-upgrade">phone upgrade deals to both new and existing customers. </a>
Starting May 30, the Ultimate Phone Upgrade will allow Verizon&#8217;s current and prospective users to enjoy top-tier offers for new devices without the need to switch carriers or worry about the condition of their trade-in phones.
With Verizon&#8217;s Unlimited Ultimate plan, customers can access the company&#8217;s best promotions for upgrading to the latest 5G phones, equipped with 5G Ultra Wideband. 
The plan includes 60GB of mobile hotspot, high-speed international roaming, and global calling to a country of choice. 
Extending beyond phone upgrades, the company is set to provide exclusive deals from premium streaming and content partners.
As part of these deals, YouTube Premium will be available as a monthly myPlan perk starting May 30, offering the service for $10 per month, a 30% discount. 
Subscribers can enjoy ad-free videos, offline viewing, and access to YouTube Music Premium.
Also Read: <a href="https://www.benzinga.com/m-a/24/05/38760979/wireless-giants-t-mobile-verizon-consider-2b-us-cellular-deal-report">Wireless Giants T-Mobile, Verizon Consider $2B US Cellular Deal: Report</a>
Additionally, Comcast Corp&#8217;s (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CMCSA#NASDAQ">CMCSA</a>) Peacock will join Verizon&#8217;s +play content hub on June 5. This includes content such as blockbuster movies, Peacock Originals, new episodes from NBC and Bravo, extensive live sports coverage, and special broadcasts from the 2024 Paris Olympic Games. 
Verizon also allows customers to bundle various streaming services into a single, cost-effective plan. For example, the Netflix Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NFLX#NASDAQ">NFLX</a>) &amp; Max (with ads) perk can be combined with the Walt Disney Co&#8217;s (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIS#NYSE">DIS</a>) Bundle for a total of $20 per month. 
This package includes Disney+, Hulu, ESPN+, Netflix (standard with ads), and Max with ads. 
Verizon stock has gained more than 12% in the last 12 months. Investors can gain exposure to the stock via Vanguard Communication Services ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VOX#NYSE">VOX</a>) and IShares Core High Dividend ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HDV#NYSE">HDV</a>).
Price Action: VZ shares are trading lower by 0.05% at $39.34 in premarket at the last check Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Verizon's New Phone Upgrade Plan Offers Discounted YouTube Premium, Peacock

Altria Group Inc&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MO#NYSE">MO</a>), maker of Marlboro, reportedly urged the U.S. Food and Drug Administration to combat illegal vape products, citing threat to public health.
Chief Executive Officer Billy Gifford criticized the FDA&#8217;s enforcement scale and scope, according to a&nbsp;<a target="_blank" href="https://www.bloomberg.com/news/articles/2024-04-25/illegal-vapes-rising-altria-mo-asks-fda-for-more-enforcement?srnd=industries-v2&amp;sref=TBDibEcD" rel="noreferrer noopener">report&nbsp;</a>from Bloomberg.
Gifford emphasized the need for&nbsp;stronger&nbsp;FDA crackdown on&nbsp;<a target="_blank" href="https://www.benzinga.com/markets/cannabis/23/07/33259407/war-on-vapes-intensifies-fda-seizes-disposable-vapes-nyc-files-lawsuit-uk-calls-for-ban-on-singl" rel="noreferrer noopener">unauthorized e-cigarettes.</a>
NJOY e-cigarette&#8217;s retail share improved, with plans to expand to 100,000 stores by year-end.
Altria reported a first-quarter FY24 sales decline of 2.5% year-on-year to $5.58 billion, beating the analyst&#8217;s consensus estimate of $4.71 billion. Adjusted EPS of $1.15&nbsp;<a target="_blank" href="https://www.benzinga.com/news/earnings/24/04/38429242/altrias-marlboro-shipment-volume-plunges-8-7-in-q1-whats-going-on" rel="noreferrer noopener">was in line with the consensus estimate</a>.
Retail&nbsp;share of&nbsp;NJOY&nbsp;in the U.S. multi-outlet and convenience channel was 4.3%, an&nbsp;<a target="_blank" href="https://www.benzinga.com/pressreleases/24/04/b38426149/altria-reports-2024-first-quarter-results-reaffirms-full-year-guidance" rel="noreferrer noopener">increase of 0.6 share points sequentially.</a>
The reported shipment volume of&nbsp;NJOY&nbsp;consumables was approximately 10.9 million units in the first quarter.
&#8220;In spite of&nbsp;the absence of an effective regulatory environment, we saw continued early momentum from NJOY and believe our businesses are on track to deliver against full-year plans,&#8221; said CEO Billy Gifford.
Altria acquired&nbsp;<a target="_blank" href="https://www.benzinga.com/m-a/23/03/31214690/altria-scoops-e-cigarette-maker-njoy-holdings-for-2-75b-cash" rel="noreferrer noopener">NJOY Holdings&nbsp;Inc</a><a target="_blank" href="https://www.benzinga.com/m-a/23/03/31214690/altria-scoops-e-cigarette-maker-njoy-holdings-for-2-75b-cash" rel="noreferrer noopener">&nbsp;in 2023 for $2.75 billion</a>.
Altria stock lost over 6% in the last 12 months. Investors can gain exposure to the stock via&nbsp;Vanguard Total Stock Market ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VTI#NYSE">VTI</a>) and&nbsp;IShares Core High Dividend ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HDV#NYSE">HDV</a>).
Price Action: MO shares are trading higher by 0.10% at $43.59&nbsp;at the last check Friday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Altria CEO Urges FDA Crackdown On Illicit Vape Products: Report

Carnage in the oil patch isn&#39;t limited to energy stocks and dedicated crude exchange traded funds. Although energy&#39;s weight is rapidly dwindling in major equity benchmarks, oil&#39;s decline has wide-ranging implications for the broader economy and global equity markets.
In the world of ETFs, oil&#39;s demise is gripping predictable fare, such as industry,<a href="https://www.benzinga.com/news/20/04/15850400/crippled-crude-oil-presents-conundrum-for-these-russia-saudi-arabia-etfs"> sector and single-country funds.</a>
But wait. There&#39;s more.
Although the sector has been an epicenter of negative dividend action this year, it&#39;s increasingly a high-yield play, both at home and abroad. Just look at the Energy Select Sector SPDR (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xle#NYSE">XLE</a>). The largest energy ETF is now yielding 14.76%.
That&#39;s staggering and as the <a href="https://www.etfrc.com/index.php">ETF Research Center</a> (ETFRC) notes, plenty of other ETFs, including some dividend funds, are being hampered by large energy weights. Here are a few examples.
See Also: <a href="https://www.benzinga.com/news/20/04/15850400/crippled-crude-oil-presents-conundrum-for-these-russia-saudi-arabia-etfs">Crippled Crude Oil Presents Conundrum For These Russia, Saudi Arabia ETFs</a>
<h3>iShares Core High Dividend ETF (HDV)</h3>
The iShares Core High Dividend ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/hdv#NYSE">HDV</a>) is a high dividend strategy by design, but with almost <a href="https://www.ishares.com/us/products/239563/?referrer=tickerSearch">a quarter of its weight</a> dedicated to energy stocks, this may not be the high-yield strategy built for these times.
HDV allocates over 16% of its weight to Dow components Exxon Mobil (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xom#NYSE">XOM</a>) and Chevron (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cvx#NYSE">CVX</a>) and those dividends are sustainable for this year, but that may be the best news to come from this ETF&#39;s outsized energy exposure, which is the highest among non-sector funds.
HDV&#39;s energy weight is, predictably, pressuring the fund as its lower by almost 21% year-to-date.
<h3>First Trust Morningstar Dividend Leaders Index Fund (FDL) </h3>
The First Trust Morningstar Dividend Leaders Index Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/fdl#NYSE">FDL</a>) shares a few of things in common with HDV. Coincidentally, both funds track Morningstar indexes. Exxon is the largest holding in both funds and more importantly, FDL joins its iShares rival in having one of the biggest energy weights among dividend funds.
FDL&#39;s energy allocation <a href="https://www.ftportfolios.com/Retail/Etf/EtfSummary.aspx?Ticker=FDL">is almost 23%</a>, the bulk of which is sourced from a combined 17% weight to Exxon and Chevron.
As yield-based strategy, FDL doesn&#39;t disappoint with a dividend yield of 6.31%, but the energy exposure implies that yield is high for a reason &mdash; one that&#39;s not positive.
<h3>WisdomTree Emerging Markets High Dividend Fund (DEM)</h3>
The WisdomTree Emerging Markets High Dividend Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dem#NYSE">DEM</a>), as its name implies, is another high-yield strategy, but with a dividend yield approaching 7%, that&#39;s elevated even by this fund&#39;s standards.
DEM&#39;s energy exposure is mainly attributable to a roughly <a href="https://www.wisdomtree.com/etfs/equity/dem">18% weight to Russia</a>, which is more than quadruple the weight assigned to that country by the MSCI Emerging Markets Index.
The fund&#39;s energy weight is also a tad above 18% and four of its energy components are found among its top 10 holdings. DEM&#39;s energy exposure is among the largest for ex-U.S. ETFs.
Disclosure: The author owns shares of DEM.

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3 Dividend ETFs With Way Too Much Energy Exposure

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.
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Analyst Color

Analyst Ratings

iShares Dow Jones Select Dividend Index Fund

Talking About Yield With Dividend ETFs

Speculation that the Federal Reserve could lower interest rates this year and the corresponding declines in Treasury yields are positives for myriad asset classes including dividend stocks, particularly those of the high-yield varietal.
Just look at the iShares Core High Dividend ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/hdv#NYSE">HDV</a>), which is higher by more than 5% over the past month, a period including the Fed&#39;s most recent meeting.
<h3>What Happened</h3>
The $7.32 billion HDV tracks the Morningstar Dividend Yield Focus Index and holds 74 stocks. HDV yields 3.46%, or 158 basis points above the dividend yield on the S&amp;P 500.
HDV&#39;s &ldquo;underlying index is comprised of qualified income paying securities that are screened for superior company quality and financial health as determined by Morningstar, Inc.&rsquo;s proprietary index methodology,&rdquo; <a href="https://www.etftrends.com/core-etf-channel/hdv-high-dividend-etf-can-keep-surging/">according to Morningstar</a>.
<h3>Why It&#39;s Important</h3>
Income investors should consider the current environment, meaning where dividend stocks are out and where the group has been.
&ldquo;High dividend yield seeks to provide exposure to above average dividend-paying companies relative to price, while dividend growth aims to invest in companies that consistently grow their dividends,&rdquo; <a href="https://www.blackrockblog.com/2019/06/20/dividend-funds-got-you-down/">said BlackRock in a recent note</a>. &ldquo;Following the Global Financial Crisis many dividend-oriented funds employ quality screens as part of their investment process.&rdquo;
While HDV is a high dividend strategy, the fund is not excessively allocated to the utilities and real estate sectors, groups that are often pillars of high-yield dividend ETFs. Those sectors combine for just 10% of HDV&#39;s roster.
&ldquo;Companies within sectors such as Consumer Staples and Utilities for example, can afford to pay more of their earnings out in the form of dividends; they are generally more established, have high barriers to entry, and are less focused on reinvesting for rapid growth,&rdquo; said BlackRock.
Energy is HDV&#39;s largest sector weight at 24% followed by consumer staples at 19%, <a href="https://www.ishares.com/us/products/239563/?referrer=tickerSearch">according to issuer data</a>.
<h3>What&#39;s Next</h3>
The sanguine interest rate outlook should continue serving as an impetus for income investors to embrace funds like HDV.
&ldquo;Higher rates have historically put pressure on dividend strategies,&rdquo; said BlackRock. &ldquo;Dividend-paying companies tend to carry more debt, which grows more expensive as rates rise; at the same time, bond yields become more attractive as interest rates rise, lowering the demand for income through dividend-paying stocks.&rdquo;
Fortunately for HDV, higher rates do not appear to be in the cards this year.
Related Links:
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<a href="https://www.benzinga.com/trading-ideas/long-ideas/19/07/14006870/finding-value-and-compensation-in-mid-cap-stocks">A Good Mid-Cap Deal</a>
Photo credit: Dan Smith - Own work <a href="https://commons.wikimedia.org/w/index.php?curid=27323">via Wikimedia Commons</a>

Federal Reserve

A Friend In The Fed For This Dividend ETF

With the Federal Reserve having already raised interest rates twice this year and with plans for perhaps two more rate hikes before year-end, high-yield dividend stocks and exchange traded funds are struggling.
Sectors with bond-like traits, such as telecommunications and utilities, are among the worst-performing groups in the S&amp;P 500 this year. Some high-yield dividend ETFs are struggling as a result. One example is the iShares Core High Dividend ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/hdv#NYSE">HDV</a>), which is off more than 4 percent year-to-date.
<h3>What To Know</h3>
As interest rates increase, it becomes harder to identify compelling dividend stocks with yields of 3 percent or more, but there are some names out there that fit that bill. Ten-year Treasury yields closed Tuesday at 2.88 percent.
&ldquo;CFRA Chief Investment Strategist Sam Stovall thinks equities remain the asset class of choice and will end up recording a single-digit price rise in 2018,&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;Meanwhile, the yield of the 10-year Treasury bond is projected to average 3.25% in the fourth quarter of 2018, up from the recent 2.9%, making it appear more challenging to spot appealing dividend-paying stocks.&rdquo;
<h3>Why It&#39;s Important</h3>
Rosenbluth said CFRA identifed 83 stocks across all 11 sectors represented in the S&amp;P 500 that have yields of 3 percent or more and are rated Buy or Strong Buy by the research firm.
The $5.71 billion HDV holds 75 stocks and tracks the Morningstar Dividend Yield Focus Index. HDV has a trailing 12-month dividend yield of 3.57 percent by way of a significant combined allocation to some high-yielding but rate-sensitive sectors. Consumer staples is the ETF&#39;s largest sector weight at 19.33 percent while the bond-like telecommunications and utilities sectors combine for almost 23 percent of the fund&#39;s weight.
HDV is one of the least expensive dividend ETFs with an annual fee of just 0.08 percent per year, or $8 on a $10,000 investment.
<h3>What&#39;s Next</h3>
Dividend growth in the U.S. remains impressive, which indicates some companies are looking to keep investors involved with their shares of government debt.
&ldquo;In the first quarter of 2018, S&amp;P 500 dividends totaled $109.2 billion, slightly down from the record of $109.5 billion from the fourth quarter of 2017,&rdquo; said Rosenbluth. &ldquo;Yet, according to Howard Silverblatt, index analyst with S&amp;P Dow Jones Indices, a new record is expected for the soon to be completed second quarter.&rdquo;
CFRA rates HDV Overweight.
Related Links:
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A High Dividend ETF That Can Bounce Back

Blue-chip averages carved out mouth-watering gains <a href="http://www.benzinga.com/general/education/17/12/10925476/asset-class-year-in-review-equities-commodities-cryptos-and-cannabi">in 2017</a>, thanks to a favorable macroeconomic milieu and still-accommodative monetary policy environment.
The S&amp;P 500 Index, a broader gauge, added 19.42 percent for the year, while the more narrow Dow Industrial Average advanced 25.08 percent. The tech-weighted Nasdaq Composite Index gained 28.24 percent.
Finding value in an overbought market is tough, and a trading strategy called the &quot;dogs of the Dow&quot; has shown to be a safer bet for picking stocks that can consistently beat the total market return.
<h3>
	A Dividend-Based Strategy</h3>
The<a href="https://www.investopedia.com/university/stockpicking/stockpicking8.asp">&nbsp;investment strategy</a>&nbsp;by money manager Michael O&#39;Higgins chooses 10 of the 30 components of the Dow Industrial Average.
The 10 stocks are picked after the last trading day of the year&nbsp;and are the 10 Dow stocks with the highest dividend yields.&nbsp;
A dividend yield is the dividend divided by the current stock price and expressed as a percentage.&nbsp;
To follow the strategy, traders invest&nbsp;equal amounts in each of the 10 stocks on the first trading day of the new year and hold them in a portfolio until the end of the year. This process is repeated at the beginning of each year.
The dogs of the Dow method is a long-term trading strategy.
See also: <a href="https://www.benzinga.com/general/biotech/17/12/10927494/the-companies-that-led-2017s-biotech-rally"> The Companies That Led 2017&#39;s Biotech Rally </a>
<h3>
	2017: A Good Year For Dogs&nbsp;</h3>
The <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/12/8831534/meet-the-new-dogs-2017s-dogs-of-the-dow-include-coca-cola-boe">Dow dogs</a>&nbsp;outperformed the S&amp;P 500 in 2017, with the average total return of the former being 23.67 percent compared to 21.83 percent for the index, Bank of America Merrill Lynch analyst Stephen Suttmeier said in a recent note.
The stocks have performed well relative to the S&amp;P 500 since 2001. IIf the Dow Jones High Yield Select 10 Total Return Index is taken as a proxy for the dogs of the Dow, their average annual return since 2001 has been 10.10 percent compared to 7.98 percent for the S&amp;P 500 Index, Suttmeier said.
<h3>
	2017 Dogs With Positive Returns</h3>
<ul>
<li>
		Boeing Co (NYSE: <a class="ticker" href="/stock/ba#NYSE">BA</a>)</li>
<li>
		Caterpillar Inc. (NYSE: <a class="ticker" href="/stock/cat#NYSE">CAT</a>)</li>
<li>
		Chevron Corporation (NYSE: <a class="ticker" href="/stock/cvx#NYSE">CVX</a>)</li>
<li>
		The Coca-Cola Co (NYSE: <a class="ticker" href="/stock/ko#NYSE">KO</a>)</li>
<li>
		Pfizer Inc. (NYSE: <a class="ticker" href="/stock/pfe#NYSE">PFE</a>)</li>
<li>
		Verizon Communications Inc. (NYSE: <a class="ticker" href="/stock/vz#NYSE">VZ</a>)</li>
</ul>
Of these, Boeing, Caterpillar and Cisco outperformed the S&amp;P 500 Index.
<h3>
	2017 Dogs With Negative Returns</h3>
<ul>
<li>
		Exxon Mobil Corporation (NYSE: <a class="ticker" href="/stock/xom#NYSE">XOM</a>)</li>
<li>
		International Business Machines Corp. (NYSE: <a class="ticker" href="/stock/ibm#NYSE">IBM</a>)</li>
<li>
		Merck &amp; Co., Inc. (NYSE: <a class="ticker" href="/stock/mrk#NYSE">MRK</a>)</li>
And the most interesting list: this year&#39;s dogs.&nbsp;
</ul>
<h3>
	BofA&#39;s Dogs Of The Dow In 2018</h3>
<ul>
<li>
		Chevron</li>
<li>
		Cisco Systems</li>
<li>
		Coca-Cola</li>
<li>
		Exxon Mobil</li>
<li>
		General Electric</li>
<li>
		IBM</li>
<li>
		Merck</li>
<li>
		Pfizer</li>
<li>
		Procter &amp; Gamble</li>
<li>
		Verizon</li>
</ul>
For passive investors, some ETFs and ETNs offer exposure to these 10 stocks. They include:
<ul>
<li>
		Deutsche Bank AG ELEMENTS Dogs of the Dow Total Return Index Note ELEMENTS Dogs of the </li>
<li>
		ALPS ETF Trust (NYSE: <a class="ticker" href="/stock/sdog#NYSE">SDOG</a>)</li>
<li>
		iShares Trust (NYSE: <a class="ticker" href="/stock/hdv#NYSE">HDV</a>)</li>
<li>
		First Trust Morningstar Divid Ledr (ETF) (NYSE: <a class="ticker" href="/stock/fdl#NYSE">FDL</a>)</li>
<li>
		Vanguard Telecommunication Services ETF (NYSE: <a class="ticker" href="/stock/vox#NYSE">VOX</a>)</li>
</ul>
Related Link:
<a href=" https://www.benzinga.com/investing/best-online-brokerage/"> Best Online Brokerage </a>

Education

SPDR Dow Jones Industrial Average ETF Trust

SDOG

A Strategy That Beat The S&P 500: Here Are Your 2018 'Dogs Of The Dow'

With higher beta &mdash; cyclical sectors leading U.S. equities higher &mdash; it is not surprising that some conservatively-positioned high dividend strategies are not keeping pace with the S&amp;P 500. That combined with barely noticeable market volatility could be prompting investors to look for more adventurous corners of the equity market, even with dividend exchange-traded funds.
Adding to the justification for looking beyond high-dividend strategies is that some previously low-yielding sectors, such as consumer discretionary and technology, continue fueling S&amp;P 500 dividend growth, a trend that has been in place for several years.
&ldquo;The more economically sensitive technology and consumer discretionary sectors&#39; contributions to the S&amp;P 500&#39;s indicated dividend rate has climbed to 15.5 percent and 9.0 percent at the end of June 2017, up from 14.7 percent and 8.1 percent at the end of 2012,&rdquo; said <a href="https://newpublic.cfraresearch.com/">CFRA Research</a> Director of ETF &amp; Mutual Fund Research Todd Rosenbluth in a note out Monday. 
<h3>Still A Case For High Dividend ETFs</h3>
The iShares Core High Dividend ETF (NYSE: <a class="ticker" href="/stock/hdv#NYSE">HDV</a>) has returned just over 4 percent year to date. That ETF has a trailing 12-month dividend yield of 3.35 percent, well above what investors will find on the S&amp;P 500 or 10-year Treasuries.
&ldquo;However, in late July, the average dividend yields for the S&amp;P 500 telecom services (4.8 percent), utilities (3.5 percent) and consumer staples (2.7 percent) sectors were above the S&amp;P 500&#39;s (2.0 percent) and the consumer discretionary (1.4 percent) along with technology (1.4 percent) sectors,&rdquo; said Rosenbluth. &ldquo;For investors seeking above-average income combined with capital appreciation potential, these defensive sectors still offer some strong choices.&rdquo;
The $6.3 billion HDV holds 74 stocks with 21.3 percent hailing from the consumer staples sector. HDV has been held back by its 16 percent allocation to the energy sector, the worst-performing group in the S&amp;P 500 this year.
<h3>A Different Strategy</h3>
The PowerShares High Yield Equity Dividend Achievers Portfolio (NASDAQ: <a class="ticker" href="/stock/pey#NASDAQ">PEY</a>) holds 50 stocks and tracks the NASDAQ US Dividend Achievers 50 Index, which employs yield and dividend growth consistency in its weighting methodology.
PEY, which allocates over 30 percent of its weight to small-cap stocks, has a trailing 12-month dividend yield of 3.2 percent. The ETF devotes over 41 percent of its weight to high-yielding utilities and consumer staples names. 
CFRA Research has an Overweight rating on HDV and a Market-Weight rating on PEY. PEY, which pays a monthly dividend, is up less than 1 percent year to date.
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<a href="https://www.benzinga.com/general/biotech/17/07/9845505/spicing-up-the-health-care-trade">Spice Up The Healthcare Trade</a>

Reiteration

Revisiting Some High Dividend ETFs

News about fee reductions in the exchange-traded funds industry often has a domino effect. For example, last week BlackRock, Inc.(NYSE: <a class="ticker" href="/stock/blk#NYSE">BLK</a>)'s iShares unveiled a significant round of fee cuts for iShares core suite of ETFs.
BlackRock, the world&#39;s largest asset manager, launched the iShares core ETFs four years ago, targeting cost-conscious, long-term investors. The iShares core lineup is now comprised of <a href="https://www.ishares.com/us/products/etf-product-list#%21type=ishares&amp;tab=overview&amp;view=list&amp;fst=50567">22 ETFs</a> and iShares, the world&#39;s largest ETF issuer, is lowering expense ratios on 15 of those funds.
That move was followed by Charles Schwab Corp (NYSE: <a class="ticker" href="/stock/schw#NYSE">SCHW</a>) saying last Friday it <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/10/8544942/schwab-has-an-answer-in-latest-etf-fee-tussle">lowered fees on five</a> of its ETFs, which were already among the industry&#39;s least expensive.
<h3>Fidelity Responds</h3>
Fidelity is not taking the move by Schwab standing down. On Wednesday, the Boston-based funds giant said it is now offering all 18 iShares core ETFs on a commission-free basis. Fidelity features an expansive commission-free ETF platform that includes only Fidelity and iShares ETFs by virtue of the company&#39;s partnership with iShares, the world&#39;s largest ETF issuer.
&ldquo;All of these ETFs have a lower expense ratio than Vanguard and State Street counterparts, and Fidelity is the only provider that offers all 18 iShares Core ETFs commission-free to advisors and investors,&rdquo; said Fidelity <a href="http://www.businesswire.com/news/home/20161012005201/en/Fidelity%C2%AE-Investors-Access-Price-Reduction">in a statement</a>.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/10/8547522/a-high-flying-industrial-etf">A High-Flying Industrial ETF</a></bzrelatedlink>
Members of the iShares core lineup include popular ETFs, such as the iShares Barclays Aggregate Bond Fund (NYSE: <a class="ticker" href="/stock/agg#NYSE">AGG</a>), iShares Core High Dividend ETF (iShares Trust (NYSE: <a class="ticker" href="/stock/hdv#NYSE">HDV</a>)) and the iShares S&amp;P 500 Index (ETF) (NYSE: <a class="ticker" href="/stock/ivv#NYSE">IVV</a>).
This is not the first step Fidelity has taken to bolster its low-cost credentials in the ETF space.
As of July 1, Fidelity&#39;s 11 sector ETFs will charge 0.084 percent per year, or $8.40 for every $10,000 invested. That is down from the ETFs&#39; original expense ratio of 0.12 percent a year. Fidelity clients can enjoy added cost savings because the firm&#39;s sector ETFs, among other ETFs, are available to its clients on a commission-free basis.
Said another way, Fidelity&#39;s sector ETFs are even less expensive than those issued by rival Vanguard.
<a href="https://pro.benzinga.com/?utm_source=Benzinga&amp;utm_medium=Benzinga%20Top%20of%20Article&amp;am%22%3">Full ratings data available on Benzinga Pro.</a>
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SCHW

Fidelity Has A Say In ETF Fee Tussle

Last week, BlackRock, Inc. (NYSE: <a class="ticker" href="/stock/blk#NYSE">BLK</a>) iShares unit, the world&#39;s largest sponsor of exchange-traded funds, shook the ETF industry with wide-ranging fee reductions to its iShares core lineup, a suite of ETFs designed four years with cost-conscious, long-term investors in mind.
All told, iShares <a href="http://www.benzinga.com/news/16/10/8530578/blackrock-flexes-its-muscles-in-fee-battle-cuts-core-etf-prices">lowered fees on 15</a> of its 22 core ETFs, including well-known offerings such as the iShares Core S&amp;P 500 Index (ETF) (NYSE: <a class="ticker" href="/stock/ivv#NYSE">IVV</a>), iShares S&amp;P SmallCap 600 Index (ETF) (NYSE: <a class="ticker" href="/stock/ijr#NYSE">IJR</a>), iShares Core High Dividend ETF (iShares Trust NYSE: <a class="ticker" href="/stock/hdv#NYSE">HDV</a>)) and the iShares Barclays Aggregate Bond Fund (NYSE: <a class="ticker" href="/stock/agg#NYSE">AGG</a>).
<h3>Mirroring Strategies</h3>
As is par for the course in the ETF business, fee cuts from one issuer are usually followed by some from a rival and usually that happens in short order. That is again the case as Charles Schwab Corp (NYSE: <a class="ticker" href="/stock/schw#NYSE">SCHW</a>) responded to the iShares fee cuts with its own fee reductions, announced last Friday.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/16/10/8535976/inside-blackrocks-etf-fee-cuts">Inside BlackRock's ETF Fee Cuts</a></bzrelatedlink>
Schwab, the fifth-largest U.S. ETF issuer, said it lowered fees on five of its ETFs, which already among the industry&#39;s least expensive. The company lowered the annual expense ratios on the Schwab U S Small-Cap ETF (NYSE: <a class="ticker" href="/stock/scha#NYSE">SCHA</a>) and the Schwab Strategic Trust (NYSE: <a class="ticker" href="/stock/schm#NYSE">SCHM</a>) to 0.06 percent, or $6 per year on a $10,000 investment, from 0.07 percent.
The Schwab International Equity ETF (NYSE: <a class="ticker" href="/stock/schf#NYSE">SCHF</a>) is now charging 0.07 percent per year, down from 0.08 percent while the Schwab Emerging Markets Equity ETF (NYSE: <a class="ticker" href="/stock/sche#NYSE">SCHE</a>) saw its fee reduced to 0.13 percent annually down from 0.14 percent.
The Schwab Strategic Trust (NYSE: <a class="ticker" href="/stock/schz#NYSE">SCHZ</a>) undercuts the aforementioned AGG by a single basis point with a new annual fee of 0.04 percent.
Schwab clients can realize additional cost savings on the company&#39;s Schwab ETF OneSource platform, the largest commission-free platform in the brokerage business.
<a href="https://pro.benzinga.com/?utm_source=Benzinga&amp;utm_medium=Benzinga%20Top%20of%20Article&amp;am%22%3">Full ratings data available on Benzinga Pro.</a>
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SCHA

SCHB

SCHE

SCHF

SCHM

SCHZ

Schwab Has An Answer In Latest ETF Fee Tussle

In a move that will be felt across the exchange traded funds industry, particularly <a href="https://investor.vanguard.com/corporate-portal/">in Pennsylvania</a>, BlackRock Inc.&#39;s (NYSE: <a class="ticker" href="/stock/blk#NYSE">BLK</a>) iShares unveiled a significant round of fee cuts for iShares core suite of ETFs.

	BlackRock, the world&#39;s largest asset manager, launched the iShares core ETFs four years ago, targeting cost-conscious, long-term investors. Over the past several years, iShares has brought previously existing ETFs into the core suite while also adding new products to the group.

	The iShares core lineup is now comprised of <a href="https://www.ishares.com/us/products/etf-product-list#!type=ishares&amp;tab=overview&amp;view=list&amp;fst=50567">22 ETFs</a> and iShares, the world&#39;s largest ETF issuer, is lowering expense ratios on 15 of those funds.
<ul>
<li>
		The iShares Core S&amp;P 500 ETF (NYSE: <a class="ticker" href="/stock/ivv#NYSE">IVV</a>) is now charging 0.04 percent a year, or $4 on a $10,000 investment, down from a previous fee of 0.07 percent.</li>
<li>
		The iShares Core S&amp;P Mid-Cap ETF (NYSE: <a class="ticker" href="/stock/ijh#NYSE">IJH</a>) and the iShares Core S&amp;P Small-Cap ETF (NYSE: <a class="ticker" href="/stock/ijr#NYSE">IJR</a>) are now charging 0.07 percent annually, down from 0.12 percent.</li>
<li>
		The iShares Core High Dividend ETF (NYSE: <a class="ticker" href="/stock/hdv#NYSE">HDV</a>) and the iShares Core Dividend Growth ETF (NYSE: <a class="ticker" href="/stock/dgro#NYSE">DGRO</a>) - two dividend ETFs - now have expense ratios of 0.08 percent, down from 0.12 percent.</li>
</ul>

	Five of the international members of the iShares core lineup now have lower fees.
<ul>
<li>
		The iShares Core MSCI Total International Stock ETF (NASDAQ: <a class="ticker" href="/stock/ixus#NASDAQ">IXUS</a>) is now charging 0.11 percent annually, down from 0.14 percent.</li>
<li>
		The iShares Core MSCI EAFE ETF (NYSE: <a class="ticker" href="/stock/iefa#NYSE">IEFA</a>) has a new fee of 0.1 percent after previously charging 0.12 percent.</li>
</ul>

	Two of the iShares international core ETFs &ndash; the iShares Core MSCI Europe ETF (NYSE: <a class="ticker" href="/stock/ieur#NYSE">IEUR</a>) and the iShares Core MSCI Pacific ETF (NYSE: <a class="ticker" href="/stock/ipac#NYSE">IPAC</a>) &ndash; are now charging 0.1 percent per year after charging 0.12 percent. The iShares Core MSCI Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/iemg#NYSE">IEMG</a>) has a new fee of 0.14 percent, down from 0.16 percent.

	Five of the iShares core fixed income ETFs also have lower expense ratios.

	Three of those ETFs &ndash; the iShares Core Total USD Bond Market ETF (NYSE: <a class="ticker" href="/stock/iusb#NYSE">IUSB</a>), iShares Core 1-5 Year USD Bond ETF (NYSE: <a class="ticker" href="/stock/istb#NYSE">ISTB</a>) and the iShares Core 10+ Year USD Bond ETF (NYSE: <a class="ticker" href="/stock/iltb#NYSE">ILTB</a>) &ndash; are charging 0.08 percent annually after carrying an annual fee of 0.12 percent.
<ul>
<li>
		The iShares Core U.S. Aggregate Bond ETF (NYSE: <a class="ticker" href="/stock/agg#NYSE">AGG</a>), the largest fixed income ETF in the US, saw its fee pared to 0.05 percent from 0.08 percent.</li>
<li>
		AGG&#39;s international equivalent, the iShares Core International Aggregate Bond ETF (BATS: IAGG), is now charging 0.11 percent a year, down from 0.15 percent. IAGG is just 11 months old and already has more than $317 million in assets under management.</li>
</ul>

Specialty ETFs

IEFA

IEMG

IEUR

ILTB

IPAC

ISTB

IUSB

IXUS

BlackRock Flexes Its Muscles In Fee Battle, Cuts Core ETF Prices

Investors love dividends and dividend exchange traded funds. Over $100 billion has flowed into such ETFs over the past five years. ETF issuers have also been embracing the ETF of ETFs structure, or those ETFs that are comprised of other ETFs.

	Those two themes meet in the newly minted Amplify YieldShares Prime 5 Dividend ETF (BATS: PFV). PFV hails from the same issuer that launched the Amplify Online Retail ETF (NASDAQ: <a class="ticker" href="/stock/ibuy#NASDAQ">IBUY</a>), one of this year&#39;s <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/09/8497921/a-new-possibly-better-way-to-play-consumer-discretionary-stoc">best-performing consumer discretionary</a> ETFs.

	The quintet of dividend ETFs comprising PFV&#39;s lineup is curated based on factors such as low fees, low volatility and income-generating potential. PFV&#39;s roster is comprised of well-known dividend and value ETFs, such as the iShares Core High Dividend ETF (NYSE: <a class="ticker" href="/stock/hdv#NYSE">HDV</a>), Vanguard High Dividend Yield ETF (NYSE: <a class="ticker" href="/stock/vym#NYSE">VYM</a>), Schwab US Dividend Equity ETF (NYSE: <a class="ticker" href="/stock/schd#NYSE">SCHD</a>), Schwab U.S. Large-Cap Value ETF (NYSE: <a class="ticker" href="/stock/schv#NYSE">SCHV</a>) and the WisdomTree High Dividend Fund (NYSE: <a class="ticker" href="/stock/dhs#NYSE">DHS</a>).

	&ldquo;Potential investors should be aware of their company exposure when investing in these types of fund-of-fund strategies. For instance, investors would be overweight large companies like Microsoft Corporation (NASDAQ: <a class="ticker" href="/stock/msft#NASDAQ">MSFT</a>), AT&amp;T (NYSE: <a class="ticker" href="/stock/t#NYSE">T</a>) and Exxon Mobil Corp. (NYSE: <a class="ticker" href="/stock/xom#NYSE">XOM</a>) as the five underlying ETFs all count these companies among their top holdings,&rdquo; according to <a href="https://www.etftrends.com/2016/09/a-new-fund-of-funds-etf-to-target-right-dividend-stocks/">ETF Trends</a>.

	DHS has been remarkably productive and rewarding for investors over the past decade. The ETF tracks the WisdomTree High Dividend Index, which is one of &ldquo;11 of WisdomTree&rsquo;s 12 dividend-weighted Indexes beat their comparable broad based cap-weighted index over the past 10 years in the U.S. and in the developed world,&rdquo; <a href="https://www.wisdomtree.com/blog/index.php/wisdomtrees-10-year-anniversary-how-did-we-do/">according to WisdomTree</a>.

	A significant driver of DHS&#39;s success is that the ETF, like other WisdomTree dividend ETFs, breaks from the norms of the dividend ETF universe. Those norms being either weighting by yield or focusing on backward-looking dividend increase streaks. Rather, DHS&#39;s underlying index &ldquo;is dividend weighted annually to reflect the proportionate share of the aggregate cash dividends each component company is projected to pay in the coming year, based on the most recently declared dividend per share,&rdquo; <a href="http://www.wisdomtree.com/etfs/index-details.aspx?indexid=3">according to WisdomTree</a>.

	SCHD is the least expensive ETF in PFV&#39;s lineup with an annual fee of just 0.07 percent. DHS is the only ETF on PFV&#39;s roster that pays a monthly dividend. The new amplify ETF charges 0.49 percent per year, or $49 on a $10,000 investment.

New ETFs

IBUY

MSFT

SCHV

Get 5 Dividend ETFs In 1 With This New ETF

Scores of countries currently sport negative interest rates, and the United States is far from impressive on that front with 10-year Treasury yields of 1.61 percent. So, it can be said that any obituaries written for dividend stocks and exchange-traded funds were done so prematurely.
While it is not cheap to chase yield, income-starved investors must also embrace valuations that often run well in excess of the broader market. That is currently the case as the combination of still low interest rates in the U.S. and investors&#39; thirst for less volatile asset classes this year is pumping up valuations on defensive groups.
<h3>Dividend Plays Aren't Dead</h3>
The case for an ETF such as the iShares Core High Dividend ETF (iShares Trust (NYSE: <a class="ticker" href="/stock/hdv#NYSE">HDV</a>)) grows stronger when noting HDV yields 3.54 percent on a trailing 12-month basis, or more than double the aforementioned yield on 10-year Treasurys.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/06/8112053/some-positive-indexing-news-for-a-frontier-markets-etf">Some Positive Indexing News For A Frontier Markets ETF</a></bzrelatedlink>
HDV follows the Morningstar Dividend Yield Focus Index, which is designed to provide exposure to highly liquid, high-yield dividend payers.
Although HDV meets the qualifications of <a href="http://www.benzinga.com/analyst-ratings/analyst-color/16/06/8076757/its-getting-pricey-to-chase-yield">a high dividend ETF</a>, the fund is not excessively to the highest-yielding and the most interest rate-sensitive sectors. For example, utilities and telecom stocks combine for just over 14 percent of the ETF&#39;s weight. However, HDV&#39;s 18.4 percent to consumer staples names is in line with what investors would expect from a high dividend ETF.
HDV&#39;s small utilities weight helps keep the ETF&#39;s valuation close to the S&amp;P 500. Utilities stocks are expensive. In a note out earlier this month, <a href="http://www.bloomberg.com/news/articles/2016-06-06/one-of-the-safest-parts-of-the-stock-market-is-getting-really-expensive">Goldman Sachs said</a> the sectors trades at a premium to the S&amp;P 500 based on 2017 and 2018 earnings estimates and that utilities&#39; forward price-to-earnings ratio is higher compared to its five-year average.
<h3>Of Rates And Growth</h3>
&ldquo;High-dividend stocks have outperformed dividend growers in the past year, but our analysis shows they historically have been vulnerable to higher rates. Dividend growers, by contrast, tend to perform well in a gradually rising rate environment. They tend to have more rate-resilient characteristics, such as strong balance sheets, and benefit from a growing economy,&rdquo; said BlackRock <a href="https://www.blackrockblog.com/2016/06/14/dividend-stock-story-chart/">in a recent note</a>.
HDV has some exposure to oil prices by way of an almost 21 percent allocation to the energy sector, the sector with most negative actions in the S&amp;P 500 dating back to last year. Still, HDV&#39;s three-year standard deviation is less than 9.8 percent and several of the ETF&#39;s top 10 holdings have dividend increase streaks that can be measured in decades.
&ldquo;We like companies with lower pay-out ratios and strong cash flows, at a time when pay-out ratios are historically high. We see attractive dividend-growth opportunities in global pharmaceuticals, international telecom, emerging market (EM) infrastructure and selected information technology companies,&rdquo; added BlackRock.

Don't Diss Dividends

Defensive sectors come with a price. Literally. Sectors such as consumer staples and utilities are prized by conservative investors for those groups&#39; low beta reputations and above average dividend yields.

	However, the usual tradeoff is that to gain those benefits, investors must also embrace valuations that often run well in excess of the broader market. That is currently the case as the combination of still low interest rates in the U.S. and investors&#39; thirst for less volatile asset classes this year is pumping up valuations on defensive groups.

	&ldquo;Dividend stocks, particularly those in more defensive industries, are and have been expensive for some time. This is a function of several trends: a preference for safe, stable companies, the growing popularity of minimum volatility funds and the quest for yield. The last one here should come as no surprise given central banks have anchored short-term interest rates at zero and long-term rates continue to be suppressed by massive asset-purchase programs and the generally sluggish nature of the global recovery,&rdquo; said BlackRock&#39;s Russ Koesterich, head of asset allocation for the BlackRock Global Asset Allocation Fund, <a href="https://www.blackrockblog.com/2016/06/03/price-for-yield/">in a recent note</a>.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/06/8076753/guess-what-junk-bond-etfs-love-oils-resurgence">Guess What? Junk Bond ETFs Love Oil&#39;s Resurgence</a></bzrelatedlink>

	Indeed, some traditional dividend ETFs are heavily exposed to richly valued sectors. For example, the $15 billion iShares Select Dividend ETF (NYSE: <a class="ticker" href="/stock/dvy#NYSE">DVY</a>) sports a price-to-earnings ratio of almost 19.4. That is likely the result of an almost 31.8 percent weight to utilities stocks, one of the largest such allocations among all ETFs that are not dedicated utilities funds.

	Utilities stocks are expensive. In a note out Monday, <a href="http://www.bloomberg.com/news/articles/2016-06-06/one-of-the-safest-parts-of-the-stock-market-is-getting-really-expensive">Goldman Sachs says</a> the sectors trades at a premium to the S&amp;P 500 based on 2017 and 2018 earnings estimates and that utilities&#39; forward price-to-earnings ratio is higher compared to its five-year average.&nbsp;

	DVY yields 3.2 percent. Other dividend ETFs are seen as expensive as well by way of large consumer staples allocations. One this year&#39;s best-performing sectors, staples are also seen as richly valued compared to the S&amp;P 500.

	For example, the iShares Core High Dividend ETF (NYSE: <a class="ticker" href="/stock/hdv#NYSE">HDV</a>) sports a valuation on par with DVY&#39;s thanks in part to an 18.4 percent consumer staples allocation. Investors are getting what they ask for HDV, though. The ETF&#39;s three-year standard deviation is less than 10 percent and it yields 3.6 percent.

	&ldquo;First, when considering the valuations on yield names, it is necessary to take into account the overall yield environment. As long as yields remain near historical lows, relative valuations are likely to stay elevated relative to the pre-crisis norm,&rdquo; adds Koesterich.

It's Getting Pricey To Chase Yield

To say the Utilities Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>) has been on fire since the start of the third quarter is an understatement. Supposedly home to some of the stodgiest stocks on the market, XLU entered Tuesday with a third-quarter gain of almost 10 percent. None of the other sector SPDR exchange traded funds are even close.

	That&#39;s right. What should be the slowest-moving of the nine sector SPDRs has needed less than two months to surge 10 percent. Investors are, literally, <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/08/5756335/utilities-etfs-keep-shining-bright">buying into the utilities move</a>. For the week ended August 17, only one ETF added more new money than XLU and since the start of the current quarter, only nine ETFs have added more than $1.05 billion hauled in by XLU.

	However, dividend ETFs heavy on utilities are still looking to join the inflows club because investors have been pulling money from these funds despite some solid third-quarter performances.

	This is a scenario Benzinga highlighted with the iShares Select Dividend ETF (NYSE: <a class="ticker" href="/stock/dvy#NYSE">DVY</a>) at the start of this month. DVY, one of the largest U.S. dividend ETFs, is known not only for its heft but it&nbsp;<a href="http://www.benzinga.com/trading-ideas/long-ideas/15/08/5725602/just-as-it-sort-of-perked-up-a-dividend-etf-lost-more-money">hefty utilities weight</a> as well.&nbsp;

	The $13.8 billion DVY allocates 33.3 percent of its weight utilities stocks, nearly triple the allocation given to its second-largest sector weight, financial services. DVY&#39;s massive utilities weight gives the ETF an inviting trailing 12-month dividend yield of 3.21 percent and a beta of just 0.62. Those traits have not been enough to lure investors back to the fund this quarter as the fund has lost $480 million. Investors departing DVY this quarter are missing out because the ETF has climbed 2.6 percent.

	The <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/08/5725602/just-as-it-sort-of-perked-up-a-dividend-etf-lost-more-money">iShares Core High Dividend ETF</a> (NYSE: <a class="ticker" href="/stock/hdv#NYSE">HDV</a>) is suffering through a similar scenario. HDV&#39;s utilities weight of 11.2 percent obviously is not as large as DVY&#39;s, but HDV does have a trailing 12-month yield of 3.66 percent.

	Resurgent consumer staples and utilities stocks, combined a third of the ETF&#39;s weight, have helped HDV notch a 1.3 percent third quarter. That is impressive when considering the ETF&#39;s 18.1 percent energy sector allocation. Still, investors have yanked $153 million from the fund.

	A dividend ETF that is really benefiting, at least terms of total returns, from a large utilities weight is the PowerShares S&amp;P 500 High Dividend Portfolio (NYSE: <a class="ticker" href="/stock/sphd#NYSE">SPHD</a>). Think of SPHD as the high dividend equivalent of the popular PowerShares S&amp;P 500 Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>). Whereas SPLV holds the 100 S&amp;P 500 members with the <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/08/5762061/low-volatility-is-absolutely-crushing-high-beta">lowest trailing 12-month volatility</a>, SPHD whittles that number down to 50 (51 right now) by combining low volatility and high yields.

	With that combination, it is not surprising that SPHD has a 23.7 percent weight to utilities, its largest sector weight. That gives the ETF a trailing 12-month yield of 3.36 percent and has helped SPHD climb 5.1 percent this quarter.

	Unfortunately for them, investors have responded by pulling $9.9 million from SPHD, but it should be noted SPHD has added $266.1 million in new assets this year, a total exceeded by just four <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/tools/flow-trend-tracker">other PowerShares ETFs</a>.

	Disclosure: The author owns shares of SPHD.

Intraday Update

SPHD

PowerShares S&P 500 Low Volatility Portfolio

SPLV

Utilities Resurgence Helps Some Dividend ETFs; Inflows A Different Story

ETF Outlook for Tuesday, April 15, 2014

	iShares MSCI Hong Kong Index ETF (NYSE: <a class="ticker" href="/stock/ewh#NYSE">EWH</a>)

	A gap higher to begin the week was enough for EWH to rally to the best level since January 2008. Often times Hong Kong is attached to China when it comes to investment performance, however they are greatly different.

	Over the last two years EWH is up 22 percent versus a loss of three percent for the iShares FTSE/Xinhua China 25 Index ETF (NYSE: <a class="ticker" href="/stock/fxi#NYSE">FXI</a>). The ETF has 90 percent of its assets in companies based in Hong Kong and seven percent in Macau. The financial stocks make up the largest portion of the portfolio.

	First Trust ISE Natural Gas Index ETF (NYSE: <a class="ticker" href="/stock/fcg#NYSE">FCG</a>)

	Even though the price of natural gas fell for the second consecutive session on Monday, the related stocks were higher as they traded at the best level in three years. The ETF closed out the day up 2.5 percent on above average volume.

	See also: <a href="http://www.benzinga.com/etfs/sector-etfs/14/04/4462458/consumer-discretionary-etf-woes-continue">Consumer Discretionary ETF Woes Continue</a>

	Two of the top three holdings, which make up 8.3 percent of the portfolio, had big days Monday. Goodrich Petroleum (NYSE: <a class="ticker" href="/stock/gdp#NYSE">GDP</a>) surged 30 percent with Comstock Resources (NYSE: <a class="ticker" href="/stock/crk#NYSE">CRK</a>) up nine percent. The combination of the two stocks was enough to push the ETF to the multi-year high.

	PowerShares Private Equity Portfolio ETF (NYSE: <a class="ticker" href="/stock/psp#NYSE">PSP</a>)

	The high-income producing ETF took a hit yesterday as it fell to the lowest level in two months with a drop of 2.3 percent. The ETF has a 12-month distribution yield of 14.17 percent, but is down six percent in the last five weeks.

	Investors appear to be cautious with the private equity situation due to the market weakness as well as the potential of rising interest rates. The ETF does have important long-term support at the $11.25 area that it does continue to hold above that is one positive factor.

	iShares High Dividend ETF (NYSE: <a class="ticker" href="/stock/hdv#NYSE">HDV</a>)

	Two bellwethers are reporting earnings this morning and should have HDV on the move. Both Johnson &amp; Johnson (NYSE: <a class="ticker" href="/stock/jnj#NYSE">JNJ</a>)and Coca-Cola (NYSE: <a class="ticker" href="/stock/ko#NYSE">KO</a>) announce their earnings before the bell Tuesday.

	The two stocks account for 11.4 percent of the entire portfolio in the ETF. The ETF has outperformed the major indices recently and is only 0.7 percent from the closing high set last week. As money has been coming out of the high-flying tech stocks it has been moving into sectors such as consumer staples and therefore HDV has benefited.

Sector ETFs

Pre-Market Outlook

First Trust ISE-Revere Natural Gas Index Fund

PowerShares Listed Private Equity Portfolio

ETF Outlook for Tuesday, April 15, 2014 (EWH, FCG, PSP, HDV)

The market is clearly wary of the once-popular chipmaker. Over the past year, Intel (NASDAQ: <a class="ticker" href="/stock/intc#NASDAQ">INTC</a>) has significantly lagged the NASDAQ composite Index and has one of the highest short ratios of any company in the Dow Jones Industrial Average. Of the 44 analysts with ratings on INTC, eight (18%) have an &ldquo;Underperform&rdquo; or &ldquo;Sell&rdquo; rating on it. By comparison, only 6.5% of all Wall Street analyst ratings are below &ldquo;Hold&rdquo;. Analysts are nearly three times more bearish on INTC than the average stock (proof of<a href="http://blog.newconstructs.com/2013/10/21/danger-zone-102113-tangoe-tngo/" style="color: rgb(0, 123, 184);">&nbsp;how Wall Street ratings can be misleading</a>).

	Remember Warren Buffet&rsquo;s famous advice: &ldquo;Be fearful when others are greedy and greedy when others are fearful.&rdquo; In this exuberant bull market where zero-profit companies boast market caps in the billions, the sentiment around INTC is as close to fearful as you&rsquo;re going to see. That&rsquo;s why now is the perfect time to get greedy.

	Why The Bears Are Wrong

	The bearish argument against INTC revolves around the perception that the company is stuck in the &ldquo;dying&rdquo; PC market and cannot catch up to competitors like ARM Holdings (NASDAQ: <a class="ticker" href="/stock/armh#NASDAQ">ARMH</a>) and Qualcomm (NASDAQ: <a class="ticker" href="/stock/qcom#NASDAQ">QCOM</a>) in the growing market for mobile devices. They point to the revenue and profit decline in recent years as the start of a long-term downtrend for the company.

	The problem with all these arguments is that they rest on the fallacy that present trends will continue indefinitely. Let&rsquo;s go through the bearish arguments point by point and examine why they don&rsquo;t hold water.

	-&nbsp;Dying PC Industry: Yes, PC sales over the past few years have seen significant declines, but reports of the personal computer&rsquo;s death are greatly exaggerated. Tablets may be great as consumption devices, but most businesses and many individuals still require the higher performance capabilities of PC&rsquo;s. Recent results from INTC suggest that PC sales are nearing a bottom, and&nbsp;<a href="http://www.imbenterprises.com/product-marketing/commodities/nvidia-q3-2014-results-support-notion-pc-sales-are-approaching-a-bottom/" style="color: rgb(0, 123, 184);">results from other companies support that conclusion</a>.

	-&nbsp;Stuck Behind Competitors: INTC is late to the game in mobile, where QCOM chips based on the ARMH architecture have grabbed a major market share. The good news is that INTC&rsquo;s management has over $23 billion of&nbsp;<a href="http://blog.newconstructs.com/2013/08/23/excess-cash-2/" style="color: rgb(0, 123, 184);">excess cash</a>&nbsp;that they are leveraging to gain traction in this high-growth market. From 2010-2012, INTC&nbsp;<a href="http://blog.newconstructs.com/wp-content/uploads/2013/11/Screen-shot-2013-11-14-at-4.08.22-PM.png" style="color: rgb(0, 123, 184);">increased R&amp;D spending by 54%</a>&nbsp;(from 2000-2010, R&amp;D only grew by 69%). INTC&rsquo;s $10 billion R&amp;D budget is more than double that of QCOM and well beyond anything ARMH can manage. A larger budget doesn&rsquo;t guarantee success, but INTC&rsquo;s budget and history of excellent chip design makes it hard to bet against the company gaining some ground in tablets and mobile devices. The&nbsp;<a href="http://www.pcworld.com/article/2054980/intels-bay-trail-chips-to-hit-10-tablets-hybrids-next-month.html" style="color: rgb(0, 123, 184);">early success</a>of INTC&rsquo;s new tablet processors suggests that the company is on the right track.

	-&nbsp;Declining Revenue and Profits: As mentioned above, the decline in profits is largely due to the impact of increased R&amp;D spending&nbsp;<a href="http://blog.newconstructs.com/wp-content/uploads/2013/11/NewConstructs_INTC_11152013.png" style="color: rgb(0, 123, 184);">(up almost $4 billion from 2010)</a>, and the revenue declines seem to be leveling off. In fact, in 3Q13 INTC actually saw a year-over-year increase in revenues as the decline in PC sales was countered by growth in INTC&rsquo;s $11 billion/year (20% of revenue) data center business.

	Fundamentally Sound

	Even with 2012 being a down year, INTC still rates highly on many of my metrics for evaluating the financial performance of a company. It has a top-quintile return on invested capital (<a href="http://blog.newconstructs.com/2012/11/08/roic-definition-and-formulae-for-return-on-invested-capital/" style="color: rgb(0, 123, 184);">ROIC</a>) of 20%, and its<a href="http://blog.newconstructs.com/2012/11/08/nopat-definition-and-formulae-for-net-operating-profit-after-tax-and-nopat-margin/" style="color: rgb(0, 123, 184);">NOPAT</a>&nbsp;margin has been increasing long-term despite decline over the past two years.

	Cash flow is not an issue for INTC. The company generated $5.7 billion of&nbsp;<a href="http://blog.newconstructs.com/2013/06/24/free-cash-flow-fcf-and-fcf-yield/" style="color: rgb(0, 123, 184);">free cash flow</a>&nbsp;in 2012, and it has a war chest of over $23 billion of&nbsp;<a href="http://blog.newconstructs.com/2013/08/23/excess-cash-2/" style="color: rgb(0, 123, 184);">excess cash</a>&nbsp;for R&amp;D spending, acquisitions, paying dividends or buying back stock. Investors should not count out any company with those kinds of resources and a history of consistently high ROIC. Management has been good at allocating capital in the past, and I expect that trend to continue.

	INTC Is a Great Value

	Now we get to the benefits of a fearful market. The bearish arguments and negative analyst ratings have done enough to keep INTC at a depressed valuation. At its current stock price of ~$24.40/share, INTC has a&nbsp;<a href="http://blog.newconstructs.com/2012/06/18/price-to-economic-book-value-or-price-to-ebv/" style="color: rgb(0, 123, 184);">price to economic book value ratio</a>&nbsp;of 0.8, which implies a permanent 20% decline in&nbsp;<a href="http://blog.newconstructs.com/2012/11/08/nopat-definition-and-formulae-for-net-operating-profit-after-tax-and-nopat-margin/" style="color: rgb(0, 123, 184);">NOPAT</a>. Figure 1 shows just how cheap this is compared to INTC&rsquo;s historical valuation
<div style="color: rgb(0, 0, 0); font-family: arial, sans-serif; font-size: 12px; line-height: normal; background-color: rgb(255, 255, 255);">

		Figure 1: INTC Has Never Been So Cheap

		<a href="http://blog.newconstructs.com/wp-content/uploads/2013/11/INTC_PEBV1.jpg" style="color: rgb(0, 123, 184);"><img alt="INTC_PEBV" class="aligncenter size-full wp-image-8827" height="217" src="http://blog.newconstructs.com/wp-content/uploads/2013/11/INTC_PEBV1.jpg" style="border-style: none; display: block; text-align: center; margin: 1em auto;" width="449" /></a>

		Sources: New Constructs, LLC and company filings
</div>

	As you can see, INTC&rsquo;s stock price significantly outran its economic book value during the early 2000&rsquo;s. Over the past decade, the stock price has remained nearly flat while profits have grown, so the company is now significantly undervalued. Figure 1 reminds me a lot of the pattern I saw when I wrote about Wal-Mart (NYSE: <a class="ticker" href="/stock/wmt#NYSE">WMT</a>) back in&nbsp;<a href="http://blog.newconstructs.com/2011/06/28/wal-mart%E2%80%99s-stock-is-a-terrific-bargain/" style="color: rgb(0, 123, 184);">July of 2011</a>.
<div style="color: rgb(0, 0, 0); font-family: arial, sans-serif; font-size: 12px; line-height: normal; background-color: rgb(255, 255, 255);">

		Figure 2:&nbsp;Wal-Mart&rsquo;s&nbsp;<a href="http://blog.newconstructs.com/2012/06/18/price-to-economic-book-value-or-price-to-ebv/" style="color: rgb(0, 123, 184);">Price-To-EBV</a>&nbsp;Chart in 2011&nbsp;

		<a href="http://blog.newconstructs.com/wp-content/uploads/2013/11/WMT_PEBV.jpg" style="color: rgb(0, 123, 184);"><img alt="WMT_PEBV" class="aligncenter size-full wp-image-8829" height="218" src="http://blog.newconstructs.com/wp-content/uploads/2013/11/WMT_PEBV.jpg" style="border-style: none; display: block; text-align: center; margin: 1em auto;" width="455" /></a>Sources: New Constructs, LLC and company filings
</div>

	Like INTC today, WMT&rsquo;s valuation was flat for nearly a decade after overshooting its fundamentals around the turn of the century. By 2011, however, WMT was significantly undervalued, so I recommended it to investors. Since then, it has returned 50%, while the S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>) returned 40%. I see similar outperformance in the future for INTC.

	INTC&rsquo;s ceiling may be even higher than Wal-Mart&rsquo;s. The no-growth value of INTC is ~$31/share. If we assume rather modest profit growth, 6% compounded annual growth rate in NOPAT over a 12 year<a href="http://blog.newconstructs.com/2013/06/24/growth-appreciation-period-gap/" style="color: rgb(0, 123, 184);">growth appreciation period</a>,&nbsp;<a href="http://blog.newconstructs.com/wp-content/uploads/2013/11/INTC_DCF_NewConstructsModel.jpg" style="color: rgb(0, 123, 184);">INTC is worth ~$50/share today</a>.

	We do not expect INTC to skyrocket up 100% in the short-term, but design wins for tablets in the near future and mobile phones starting in 2014 could prove to be catalysts to send the stock price upward. For the long-term investor, INTC has strong potential upside with relatively little downside risk due to its cheap valuation.

	Good Funds With Exposure to INTC

	Investors looking to hold INTC indirectly through an ETF or mutual fund should look to the following funds due to their Attractive ratings and 3% or more allocation to INTC.

	1)&nbsp;&nbsp;&nbsp;&nbsp; iShares High Dividend ETF (NYSE: <a class="ticker" href="/stock/hdv#NYSE">HDV</a>): 4.4% allocation to INTC and Attractive rating.

	2)&nbsp;&nbsp;&nbsp;&nbsp; SunAmerica Series: Focused Dividend Strategy Portfolio (FDSBX, FDSTX, FDSWX): 3% allocation to INTC and Attractive rating.

	Sam McBride contributed to this report

	Disclosure: David Trainer is long INTC. David Trainer and Sam McBride receive no compensation to write about any specific stock, sector, or theme.

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