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Looking for a steady income stream to provide stability in your portfolio? Here are five of the best dividend ETFs to invest in this year, ranked by assets.
Dividend stocks may be able to help narrow the performance gap for a value investor in an environment where growth stocks are outperforming. But whether a company pays a dividend isn’t the only factor to consider.
Dividend yields recently surpassed those of benchmark Treasury notes for the first time since 2016, potentially providing further support for equity markets and dividend-paying stock exchange traded funds in this prolonged low-rate environment. According to Bank of America data, dividend yields for the S&P 500 index at 1.89% surpassed the yield of 10-year Treasuries at 1.5% for the first time in three years, CNBC reports. “Stocks are a ‘no brainer’ vs. bonds,” Bank of America analyst Savita Subramanian said in a note.
The SPDR S&P Dividend ETF (NYSE: SDY) has been getting some press lately and one reason for that is the fund's impressive mandate of only holding stocks that have boosted payouts for 20 consecutive years. “The S&P High Yield Dividend Aristocrats has diversified sector exposures, with some sector bets, given different dividend-paying practices among sectors,” said S&P Dow Jones Indices in a recent note.
As was recently noted here, SDY tracks the S&P High Yield Dividend Aristocrats Index, a benchmark that requires member firms to have minimum dividend increase streaks of 20 years, and that index has a lengthy track record of topping the S&P Composite 1500 Index.
As exchange traded fund investors look to the rest of the year ahead, many are considering factor-based or alternative indexing methodologies for smarter investment strategies. In the recent webcast, Q4 ...
With jolts of volatility throughout the first half of the year, investors need to consider smart strategies to adapt to changing conditions in a late business cycle. In the upcoming webcast, Q4 Market ...
Bank of America believes that the S&P 500 will close 2019 unchanged, but see dividend payers as superior to bonds for the short and long terms.
With rates depressed and attractive yields hard to come by in the fixed-income market, investors may want to consider dividend-paying stocks and related ETFs. Goldman Sachs argued that dividend payers ...
Want relatively safe income from high dividend stocks? For yield that beats the market average, up to more than double that much, check out these funds.
The Federal Reserve did what investors were hoping for Wednesday -- that is, lowering interest rates. Perhaps it was a case of selling the news or market participants wanting an 0.5% rate cut instead of the 0.25% the Fed delivered, but stocks were drubbed in the final trading day of July.Source: Shutterstock In cutting rates by 25 basis points, the Fed left the door open for another rate reduction later this year. Right now, it appears likely that another rate cut will indeed happen. Couple that with the $13 trillion in negative yielding bonds around the world and the low-interest-rate environment seen the world over and you have a recipe for increasing the allure of a beloved asset class: dividend stocks.The amount was not massive, but a handful of dividend exchange-traded funds (ETFs) hit record highs on Wednesday and some data points indicate investors have recently been piling into dividend ETFs, perhaps in anticipation of ongoing declines in Treasury yields.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 8 of the Most Shorted Stocks in the Markets Right Now With the U.S. remaining one of the dominant forces in global dividend growth and with interest rates here declining, investors can mix and match both dividend growth and high dividend ETFs in the current market environment. Here are some of the dividend ETFs that are primed to deliver for investors over the rest of 2019 and beyond. Dividend ETFs: SPDR S&P Dividend ETF (SDY)Expense Ratio: 0.35% per year, or $35 on a $10,000 investment.The SPDR S&P Dividend ETF(NYSEARCA:SDY) is one of the dividend ETFs that hit all-time highs on July 31 and one that has recently been luring investors. For the week ending July 30, SDY garnered $1.26 billion in new assets, a total exceeded by just two other ETFs over that period.The SPDR S&P Dividend ETF is an appropriate fund for this climate because it dances between high dividend and payout growth.SDY tracks the S&P High Yield Dividend Aristocrats Index. Obviously, that benchmark has "high yield" in its name, but this dividend ETF yields just 2.4%. More importantly, SDY's 112 components must have dividend increase streaks of 20 years to be included in the fund. While SDY is not necessarily a proper high-dividend ETF, it can provide some leverage to declining interest rates because rate-sensitive sectors such as consumer staples, utilities and real estate combine for nearly a third of the fund's weight.SDY is appropriate for a variety of investors, but it might be best deployed by conservative investors looking to reduce portfolio volatility. Over the past three years, SDY is trailing the S&P 500 by a healthy margin, but the dividend ETF has been significantly less volatile and its maximum drawdown over that span was well bellow that of the broader market. O'Shares FTSE Russell Small Cap Quality Dividend ETF (OUSM)Source: Shutterstock Expense Ratio: 0.48%The O'Shares FTSE Russell Small Cap Quality Dividend ETF (NYSEARCA:OUSM) is an ideal fund for risk-averse investors to tap small-cap stocks, an asset class that data suggest is increasingly fertile territory for dividend seekers.OUSM tracks the FTSE USA Small Cap ex Real Estate 2Qual/Vol/Yield 3% Capped Factor Index, which "is designed to reflect the performance of publicly-listed small-capitalization dividend-paying issuers in the United States exhibiting high quality, low volatility and high dividend yields," according to O'Shares. * 7 A-Rated Stocks Under $10 Interestingly, OUSM is home to nearly 220 stocks, or more than triple the roster of the Russell 2000 Dividend Growth Index. Another interesting factoid for investors to consider is this dividend ETF's return on assets (ROA), a key metric in evaluating payout growth potential. OUSM has an ROA of 8.2% compared to just 0.3% for the Russell 2000. So it's probably not surprising that the dividend ETF is outperforming the small-cap benchmark over the past year. Global X SuperDividend U.S. ETF (DIV)Expense Ratio: 0.45%The Global X SuperDividend U.S. ETF (NYSEARCA:DIV) makes good on the promise of being a "super dividend" play with a trailing 12-month dividend yield of 7.3%, but this dividend ETF is struggling this year with a gain of just 3%. One of the obvious drags on this dividend ETF is energy exposure, be it via master limited partnerships (MLPs) or traditional energy stocks. Those asset classes combine for almost 20% of DIV's weight, though MLPs, broadly speaking, have been solid this year.Despite the struggles, this is one dividend ETF that could be poised to bounce back as markets price in expectations of more dovish Fed action. DIV is loaded with rate-sensitive asset classes. That includes mortgage REITs, consumer staples and utilities stocks combining for over 43% of DIV's roster.In addition to having a lower beta and lower annualized volatility relative to the S&P 500, this dividend ETF has another perk, particularly for investors looking for regular income.It pays a monthly dividend. ProShares MSCI Europe Dividend Growers ETF (EUDV)Expense Ratio: 0.55%Remember that $13 trillion in negative-yielding bonds I mentioned earlier? A lot of it resides in Europe, meaning if an investor picks the wrong European bond, he or she will lose money. The ProShares MSCI Europe Dividend Growers ETF (CBOE:EUDV) is a dividend ETF that is a superior option to most European sovereign debt at the moment.Developed European economies, namely the U.K. and Switzerland, are among the better dividend growth alternatives to the U.S. This dividend ETF is a play on payout growth as its index requires a minimum dividend increase streak of a decade. In Europe, that's an exclusive club because EUDV has just 34 holdings and British and Swiss stocks combine for over the fund's geographic exposure. * The 10 Best Stocks to Invest in for August About 40% of EUDV's currency exposure is in euros, a trait that could benefit investors if the European Central Bank (ECB), as is widely expected, unleashes more monetary stimulus. In fact, a case can be made that the ECB has no choice but to unfurl easy monetary policy to lift some slow-moving economies in the Eurozone. WisdomTree Emerging Markets High Dividend Fund (DEM)Expense Ratio: 0.63%The WisdomTree Emerging Markets High Dividend Fund (NYSEARCA:DEM) fits the bill as a high-dividend ETF as highlighted by its distribution yield of 4.8%, or more than double the dividend yield on the MSCI Emerging Markets Index. Oh, and this dividend ETF is beating the emerging markets benchmark by nearly 200 basis points this year with lower volatility.As is to be expected, emerging-markets dividend ETFs look and act much different than U.S. equivalents. Due to the fact that this universe of dividend payers is more fractured than Europe or the U.S., it is reasonable to expect some emerging markets dividend ETFs have geographic concentration risk and that is true of DEM. The WisdomTree fund nearly two-thirds of its weight to Taiwan, China and Russia.And while DEM is acting less turbulent than the MSCI benchmark this year, the dividend ETF has heavy cyclical exposure with about 54% of its weight allocated to financial, energy and materials stocks. Among other traits, one in favor of DEM is the potential for a swath of interest rate cuts across developing economies, such as the one unveiled by Brazil on Wednesday.As of this writing, Todd Shriber owned shares of DEM. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 8 of the Most Shorted Stocks in the Markets Right Now * 7 Charts That Should Concern Marijuana Stock Investors * 8 Monthly Dividend Stocks to Buy for Consistent Income The post 5 Dependable Dividend ETFs to Invest In appeared first on InvestorPlace.
State Street's (NYSE:STT) SPDR brand is one of the most recognizable brands in the ETF universe. With that superior brand recognition comes heft. As of June 26, SPDR is the third-largest U.S. ETF sponsor and has $642.6 billion in ETF assets under management. That is more than triple the amount of its next-largest peer.In terms of sheer population, there are hundreds of SPDR ETFs, but among the issuer's most well-known offerings are the SPDR S&P 500 ETF (NYSEARCA:SPY), the world's largest ETF; the SPDR Gold Shares (NYSEARCA:GLD), the world's largest gold-backed fund; and a the largest (by assets) lineup of sector ETFs, including the Financial Sector Spider ETF (NYSEARCA:XLF).SPDR ETFs span an array of asset classes, including stocks, bond, commodities and real estate, among others. Additionally, there are some inexpensive SPDR ETFs, meaning frugal investors can find plenty of funds to embrace in the SPDR lineup.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks That Should Be Every Young Investor's First Choice You probably already know about the likes of GLD and SPY, so let's look at some other SPDR ETFs that may merit a place in your portfolio. SPDR S&P Dividend ETF (SDY)Source: Shutterstock Expense ratio: 0.35% per year, or $35 on a $10,000 investment.SPDR ETFs include several dividend funds and the SPDR S&P Dividend ETF(NYSEARCA:SDY) is one of the gems of the bunch. Home to $18.54 billion in assets under management, SDY is one of the largest dividend ETFs, but this SPDR ETF impresses on several other fronts, including its status as a clear quality play.SDY targets the S&P High Yield Dividend Aristocrats and while that index overtly says "high yield" in its name, this SPDR ETF is a credible dividend growth play because the index requires member firms to have dividend increase streaks of at least 20 years. That is one of the longest such requirements among all dividend funds."Due to the index screen for 20 years of consecutively raising dividends, stocks included in the Index have both capital growth and dividend income characteristics, as opposed to stocks that are pure yield," according to State Street.SDY holds 112 stocks and allocates over a third of its combined weight to the industrial and financial services sectors. SPDR S&P Bank ETF (KBE)Source: Shutterstock Expense ratio: 0.35%Speaking of the financial services sector, one of the best SPDR ETFs to consider over the near-term is the SPDR S&P Bank ETF (NYSEARCA:KBE). Unlike the aforementioned XLF, KBE is dedicated to bank stocks, meaning investors will not find diversified financial companies or property and casualty insurance providers in this SPDR ETF.KBE is up nearly 16% year-to-date, an impressive resurgence after bank stocks languished in 2018. More good news for this SPDR ETF and rival bank funds emerged on June 28 following the completion of the Federal Reserve's Comprehensive Capital Analysis and Review, or CCAR. * 3 Dow Jones Stocks to Buy for the Second Half To put things simply, the CCAR results pave the way for many of the largest U.S. banks, including plenty of KBE components, to significantly boost dividends and share repurchase efforts. KBE yields just 2.11% so there is plenty of room for dividend growth with this SPDR ETF. SPDR Gold MiniShares Trust (GLDM)Source: Shutterstock Expense ratio: 0.18%Gold has been a torrid pace, putting the spotlight on related ETFs, including the SPDR Gold MiniShares Trust (NYSEARCA:GLDM). A simple way of looking at this SPDR ETF is that it is the cost-effective counterpart to the aforementioned GLD."Shares of GLDM are designed for investors who want a cost-effective and convenient way to invest in gold and will be offered on a continuous basis," according to State Street.In late June, GLDM celebrated its first birthday and the SPDR ETF has more than $788 million in assets under management, indicating investors like a good deal with gold ETFs, too.With the Federal Reserve poised to lower interest rates and the dollar already weakening, this SPDR ETF could continue surging over the near term. SPDR Portfolio Emerging Markets ETF (SPEM)Source: Shutterstock Expense ratio: 0.11%With $2.74 billion in assets under management, the SPDR Portfolio Emerging Markets ETF (NYSEARCA:SPEM) is not a small SPDR ETF, but it is overlooked relative to some other emerging markets ETFs offered by rival issues. That said, SPEM has at least one thing going for it: currently, it is the cheapest emerging markets ETF available in the U.S.SPEM offers broad, cost-effective emerging markets exposure as it holds 1,542 stocks from nearly 30 countries. Investors should note South Korean stocks are not part of this SPDR ETF because SPEM tracks and S&P index and that index provider classifies South Korea as a developed market. China, Taiwan and India combine for about 59% of SPEM's geographic exposure. * 3 Energy Stocks to Trade Now With Confidence Due to the lack of South Korea exposure, investors should expect SPEM to generate significantly different returns over the long-term than the MSCI Emerging Markets Index. This SPDR ETF has adequate exposure to growth sectors with communication services and consumer discretionary names combining for about a quarter of the fund's roster. SPDR Bloomberg Barclays Convertible Securities ETF (CWB)Source: Shutterstock Expense ratio: 0.40%SPDR ETFs featured an extensive lineup of fixed funds, including some products with niche focuses. For its part, the SPDR Bloomberg Barclays Convertible Securities ETF (NYSEARCA:CWB) is the dominant name among convertible bond ETFs and index funds.In the fixed income space, convertibles are one of the segments with high correlations to equities because convertible bonds can be converted into common stock of the underlying issuer. With that in mind, it is not surprising to see CWB perform well when equities are doing the same.Though this point may be rendered moot over the near-term because the Fed could lower interest rates, long-term investors may want to consider CWB because convertible bonds often outperform other fixed income assets when interest rates rise. Due to its upside linkage to equities, that is CWB's primary form of investor compensation, meaning the fund is a lower yielder compared to traditional corporate bond ETFs. SPDR S&P Biotech ETF (XBI)Source: Shutterstock Expense ratio: 0.35%The SPDR S&P Biotech ETF (NYSEARCA:XBI) is one of the most popular biotech ETFs and sets itself apart in a crowded field by being an equal-weight, not a cap-weighted fund. This SPDR ETF's 119 holdings have a weighted average market value of $10.3 billion, indicating this is primarily a mid-cap fund.XBI's weighting methodology leads to vastly different returns relative to its cap-weighted rivals. While the tilt to smaller stocks makes this SPDR ETF more volatile than cap-weighted biotech funds, XBI has outperformed the Nasdaq Biotechnology Index by a margin of better than 2-to-1 over the past three years.This SPDR ETF is up nearly 20% year-to-date and some market observers see more upside coming for biotechnology stocks and ETFs. * 7 Stocks on Sale the Insiders Are Buying "In the last month this group has actually been the best-performing sector of any of the major groups," said Newton Advisors technical analyst Mark Newton in an interview with CNBC. "Just in the last couple of weeks, you've seen this entire downtrend since late last year be broken in health care relative to the S&P," he said of a trendline stretching from its peak in December to mid-May." SPDR S&P International Dividend ETF (DWX)Source: Shutterstock Expense ratio: 0.45%The SPDR S&P International Dividend ETF (NYSEARCA:DWX) is over 11 years old and has nearly $833 million in assets under management, so this SPDR ETF is neither new nor small, but it can be overlooked. Still, DWX is a practical option for investors looking for exposure to high dividend ex-US stocks.This SPDR ETF "seeks to provide exposure to the 100 highest yielding international common stocks that have passed certain sustainability and earnings growth screens," according to State Street.DWX is a focused fund with just 97 holdings, but its dividend yield of 4.03% is more than double that of the S&P 500. Up nearly 13% year-to-date, DWX is outperforming the MSCE EAFE Index by about 100 basis points.DWX provides exposure to 20 countries, three of which are developed markets, but Canada and Australia combine for almost 34% of the fund's weight.Todd Shriber owns shares of XLF. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks That Should Be Every Young Investor's First Choice * 5 IPO Stocks to Buy -- According to Wall Street Analysts * The Top 10 Best Sectors in the Market for 2019 The post 7 of the Best SPDR ETFs -- Besides SPY and GLD appeared first on InvestorPlace.
Most investment factors are easy to understand. Value stocks are those names perceived to be trading at discounts to the broader market. Growth stocks are those posting superior earnings and revenue increases, while the low volatility factor offers exposure to equities with favorable volatility traits.When it comes the quality factor, however, there are varying definitions and traits used by investors to assess what constitutes quality."It's likely the factor where opinions are most diverse regarding the definition," according to Factor Research. "Broadly speaking there are qualitative and quantitative evaluations and these are often combined in a scoring model. Criteria like management quality or the soundness of strategy are intuitively appealing, but difficult to verify given a lack of data."InvestorPlace - Stock Market News, Stock Advice & Trading TipsWhile definitions for quality vary, some of the factor's stickier attributes would include companies that are not highly leveraged -- or at the very least if they carrying debt, they have strong credit ratings and interest coverage ratios, strong return on assets (ROA) and return on equity (ROE), modest earnings variability, and solid management teams. Penchants for rewarding investors via buybacks and dividends can also be part of the quality assessment. * 7 Stocks to Buy As They Hit 52-Week Lows Investors wanting to integrate quality into their portfolios are in luck because there plenty of dedicated quality ETFs on the market today. Here are some of the best of breed quality ETFs to consider. iShares Edge MSCI USA Quality Factor ETF (QUAL)Source: PixabayExpense ratio: 0.15% per year, or $15 on a $10,000 investment.Home to $10.55 billion in assets under management, the iShares Edge MSCI USA Quality Factor ETF (CBOE:QUAL) is the king of dedicated quality ETFs. QUAL, which turns six years old next month, tracks the MSCI USA Sector Neutral Quality Index and holds 125 stocks.This ETF's approach to quality is straight forward as it targets "stocks exhibiting positive fundamentals (high return on equity, stable year-over-year earnings growth and low financial leverage)," according to iShares.Like other factor-based strategies, quality ETFs usually are not required to have overweight exposure to a particular sector or sectors. However, some groups often display more quality intensity than others. When it comes to QUAL, this quality ETF allocates almost half its combined weight to the technology, healthcare and financial services sectors.Quality can also mean lower volatility as highlighted by QUAL's three-year standard deviation of 10.94%, which is lower than the same metric on some other single-factor funds. JPMorgan U.S. Quality Factor ETF (JQUA)Source: Shutterstock Expense ratio: 0.12%The JPMorgan U.S. Quality Factor ETF (NYSEARCA:JQUA) is another dedicated quality ETF and an inexpensive one at that. With an annual fee of just 0.12%, JQUA is one of the cheapest single-factor funds that is not a value or growth strategy. JQUA uses "a rules-based approach that matches Russell 1000 sector weights and selects stocks based on quality and profitability characteristics," according to JPMorgan Asset Management.JQUA holds nearly 230 stocks, giving it a deeper bench than the aforementioned QUAL. Perhaps the biggest advantage of this quality ETF is its robust ROE. At the end of April, JQUA's ROE was 28.36%, or nearly 800 basis points above that of the Russell 1000 Index, according to issuer data. * 7 A-Rated Stocks to Buy Under $10 JQUA allocates about 55% of its combined weight to the technology, financial services and consumer discretionary sectors. Year-to-date, this quality ETF is higher by nearly 14%. SPDR S&P Dividend ETF (SDY)Source: Shutterstock Expense ratio: 0.35%As has been widely noted, dividends are integral to well-balanced portfolios and vital to investors' long-term outcomes. Dividends are also one of the premier quality traits, particularly dependable dividend growth. Hence, the SPDR S&P Dividend ETF (NYSEARCA:SDY) merits a place in this discussion of quality ETFs.SDY, one of the largest domestic dividend ETFs, tracks the S&P High Yield Dividend Aristocrats Index, which requires member firms to have increased payouts for at least 20 consecutive years. Although SDY's components are weighted by yield, this is not a high-yield fund as highlighted by its trailing 12-month dividend yield of 2.37%.The industrial, financial services and consumer staples sectors combine for almost half of SDY's weight, giving it a different sector profile than the aforementioned quality ETFs. With the business cycle in its late innings, some market observers believe quality ETFs will benefit investors."Stretched valuations and slowing growth depict a late cycle environment, but this doesn't mean that investors should abandon equities," said State Street in a recent note. "Focusing on quality stocks with reasonable valuations may mitigate the episodic microbursts of volatility typical of a late-cycle market." WisdomTree U.S. SmallCap Quality Dividend Growth Fund (DGRS)Source: Shutterstock Expense ratio: 0.38%Yes, the WisdomTree U.S. SmallCap Quality Dividend Growth Fund (NASDAQ:DGRS) has "quality" in its name, but this fund is a credible quality ETF for more valid reasons. Notably, DGRS' weighting methodology emphasizes ROA and ROE.Those are important traits with dividend stocks because strong ROA and ROE metrics imply companies not only have the ability to sustain current payouts, but raise those dividends in the future. Using ROA and ROE with small-cap stocks can prove efficacious because many smaller companies take on debt to fuel growth, punishing ROA and ROE along the way."We also know that typically companies that have the highest debt burdens are more acutely exposed to a deceleration in the economy," according to WisdomTree. * 4 Antitrust Tech Stocks to Keep an Eye On Not surprisingly, DGRS outpaced the Russell 2000 Index by more than 450 basis points during the 2018 fourth-quarter market swoon. Although DGRS is a dividend growth strategy, its yield is more than double that of the Russell 2000. Invesco S&P 500 Quality ETF (SPHQ)Source: Shutterstock Expense ratio: 0.15%The Invesco S&P 500 Quality ETF (NYSEARCA:SPHQ) is one of the elder statesmen of the quality ETF group having debuted in late 2005. Age usually should not be a deciding factor when it comes to ETFs, but SPHQ's long track record gives investors willing to do some homework an idea of how the fund has performed across multiple market cycles, good and bad.SPHQ follow the S&P 500 Quality Index. That benchmark is home to 100 S&P 500 members "that have the highest quality score, which is calculated based on three fundamental measures, return on equity, accruals ratio and financial leverage ratio," according to Invesco.For investors that want to focus on ROE, SPHQ is a quality ETF that makes a lot of sense because its ROE is a stellar 42.70%.That says something about the technology sector because that group accounts for 41.71% of this quality ETF's weight. Healthcare and consumer discretionary names combine for almost 21% of SPHQ's roster.Todd Shriber does not own any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy As They Hit 52-Week Lows * 4 Antitrust Tech Stocks to Keep an Eye On * 5 Gold and Silver Stocks Touching Intraday Highs Compare Brokers The post 5 Quality ETFs That Qualify for Your Portfolio appeared first on InvestorPlace.
Editor's note: This story was previously published in February 2019. It has since been updated and republished.Many folks infer an element of royalty when they hear the word "aristocrat." While the U.S. is a democracy, not a monarchy, there are plenty of ways for dividend investors to become aristocratic in their own right.Several exchange-traded funds (ETFs) track indices that are known as dividend aristocrats indices. The alluring thing about dividend aristocrats ETFs is that these funds emphasize dividend growth, not yield. High yields, while seductive, have some drawbacks investors should consider.InvestorPlace - Stock Market News, Stock Advice & Trading TipsDividend growth can be a sign that a company has a sound balance sheet and the capacity to continue delivering steady payout increases whereas some high-yield companies could be in financial distress and close to cutting their payout. * 10 Great Stocks to Buy on Dips For investors looking to put the potency of dividend growth to work in their portfolios, here are some of the most royal names among dividend aristocrats ETFs. SPDR S&P Dividend ETF (SDY)Expense ratio: 0.35% per year, or $35 on a $10,000 investment.The SPDR S&P Dividend ETF (NYSEARCA:SDY) is the original dividend aristocrats ETF and one of the largest U.S. dividend ETFs of any variety. SDY follows the S&P High Yield Dividend Aristocrats Index, which mandates that member firms have minimum dividend increase streaks of 20 years."Due to the index screen for 20 years of consecutively raising dividends, stocks included in the Index have both capital growth and dividend income characteristics, as opposed to stocks that are pure yield," according to State Street.While SDY's index implies it is a high-yield benchmark, the fund's dividend yield of 2.43% is not alarmingly high and implies plenty of room for continued dividend growth. Likewise, this dividend aristocrat ETF is not excessively allocated to high-yield sectors as utilities and real estate stocks combine for less 17% of the fund's weight. ProShares S&P 500 Dividend Aristocrats ETF (NOBL)Expense ratio: 0.35% per yearThe ProShares S&P 500 Dividend Aristocrats ETF (CBOE:NOBL) is the ETF that tracks the S&P 500 Dividend Aristocrats Index, also known as THE dividend aristocrats index. That index requires member firms to have boosted payouts for at least 25 consecutive years.A benefit of dividend aristocrats ETFs that should not be overlooked is reduced volatility. Both NOBL and SDY have less volatile than the S&P 500 over the past three years. Additionally, dividend aristocrats ETFs can expose investors to reduced downside when stocks decline. While the S&P 500 slumped 4.60% last year, NOBL was lower by just 3.30%. * 7 Strong Buy Stocks That Tick All the Boxes While NOBL is not the most adventurous fund on the market, this dividend aristocrats ETF makes a lot of sense for younger investors that can reinvest dividends. Over the past three years, NOBL is up 43% with dividends reinvested compared to 34.30% without reinvested dividends. SPDR S&P Global Dividend ETF (WDIV)Expense ratio: 0.40% per yearOften overlooked in the dividend aristocrats ETF conversation, the SPDR S&P Global Dividend ETF (NYSEARCA:WDIV) can be seen as the global complement to the aforementioned SDY.WDIV follows the Global Dividend Aristocrats Index, which mandates a minimum dividend increase streak of at least a decade.That index "includes the top 100 qualified stocks with the highest indicated dividend yield, with no more than 20 stocks selected from each country and 35 stocks from each GICs sector," according to State Street.WDIV, which yields 3.82%, provides exposure to almost 20 countries, the bulk of which are developed markets. Canada and the U.S. combine for over 42% of this dividend aristocrats ETF's geographic exposure. ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL)Expense ratio: 0.40% per yearThe epitome of an overlooked asset class, mid-cap stocks are also overlooked when it comes to dividends, but that should not be the case. There are several dedicated mid-cap dividend funds, but the ProShares S&P MidCap 400 Dividend Aristocrats ETF (CBOE:REGL) is the dividend aristocrats ETF in that group.REGL follows the S&P MidCap 400 Dividend Aristocrats Index, a derivative of the S&P MidCap 400 Index. This dividend aristocrats ETF requires its components to have minimum dividend increase streaks of 15 years. That is a stringent requirement for small stocks and as such, REGL has a smaller roster of just 49 holdings.Like its large-cap brother NOBL, REGL can help investors weather market storms. Last year, this dividend aristocrats ETF lost just 3.30% while the S&P MidCap 400 plunged 11.30%. REGL allocates over 45% of its combined weight to financial services and industrial stocks. ProShares MSCI Europe Dividend Growers ETF (EUDV)Expense ratio: 0.55% per yearIn the strictest sense of being a dividend aristocrats ETF, the ProShares MSCI Europe Dividend Growers ETF (CBOE:EUDV) is not one of those funds simply because the ETF does not track a dividend aristocrats index. Overlook that technicality and investors will find a viable income-generating avenue to Europe.EUDV's underlying index requires a minimum dividend increase streak of 10 years, which is an important trait considering plenty of European companies cut dividends during the region's sovereign debt crisis earlier this century. Just 35 companies meet the requirements for admission into EUDV.Many Europe dividend ETFs are heavily allocated to the U.K. and Switzerland. EUDV obliges as those countries combine for over 51% of the fund's weight. France, which saw record dividend growth in 2018, is EUDV's second-largest geographic exposure at 11.70%.EUDV is ahead of the S&P Europe 350 Index by 400 basis points over the past year. Invesco Dividend Achievers ETF (PFM)Expense ratio: 0.55% per yearThe Invesco Dividend Achievers ETF (NASDAQ:PFM) is not a dividend aristocrats ETF, but it does offer quality exposure to domestic large-caps with dividend increase streaks of at least a decade.There is often some intersection of dividends and the value factor, but PFM does allocate over 20% of its weight to growth stocks. Eight of PFM's top 10 holdings are members of the Dow Jones Industrial Average. With the dividend increase streak requirement of 10 years, PFM is heavy on sectors found in traditional dividend aristocrats ETFs, including consumer staples and industrials.The rub with PFM is its high fee. A slew of dividend growth strategies, including dividend aristocrats ETFs, can be had with much lower expense ratios. Vanguard International Dividend Appreciation ETF (VIGI)Expense ratio: 0.25% per yearThe Vanguard International Dividend Appreciation ETF (NASDAQ:VIGI) is not a true dividend aristocrats ETF, but as the international answer to the popular Vanguard Dividend Appreciation ETF (NYSEARCA:VIG), VIGI does provide exposure to stocks with penchants for steadily boosting payouts. Keeping with Vanguard's tradition of low-cost leadership, VIGI is one of the most cost-effective international dividend strategies on the market today.VIGI is a blend of developed and emerging markets dividend payers, so a relevant comparison is the MSCI All-Country ex-US Index, a benchmark the Vanguard fund has trailed over the past three years. However, over the past years, VIGI is beating that benchmark with a little less volatility.VIGI holds 357 stocks with a median market capitalization of $41.4 billion. India is the fund's largest emerging market weight at 14.1% while France and the U.K. combine for 23.6%.As of this writing, Todd Shriber did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks That Won Super Bowl Sunday * 7 High-Yield ETFs for Brave Investors * 10 F-Rated Stocks That Could Break Your Portfolio Compare Brokers The post Are These 7 Dividend Aristocrats ETFs Fit for a King? appeared first on InvestorPlace.
Investors who are concerned that the trade negotiations can breakdown into a full out trade war should look to dividend growers and related ETFs. “We are thinking about some of the drivers of profit growth going forward, and we are looking at some of the communication services stocks,” Avid Kostin, Goldman Sachs chief U.S. equity strategist, told CNBC. Goldman also screens for stocks with big dividends and low labor costs in portfolios for its own clients.
Now that tax season is in the rearview mirror, investors can get back to contributing to their retirement portfolios, including individual retirement accounts (IRAs). Good news for investors: IRA contribution limits are moving up.Investors under 50 years old can now contribute up to $6,000 per year to traditional and Roth IRAs while individuals 50 years old and older can add another $1,000 to that figure, according to the IRS.For investors that enjoy building their retirement portfolios themselves, ETFs are among the ideal vehicles for use in tax-advantaged accounts, such as IRAs. As has been widely noted, many of the best ETFs are also inexpensive, providing a significant benefit to long-term investors.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMany of the best retirement ETFs for consideration in IRAs should be cheap funds because high fees can erode long-term total returns. Additionally, ETFs help investors efficiently access an array of asset classes, helping bolster portfolio diversification. * The 10 Best Stocks to Buy for May Here are some of the best retirement ETFs to consider if you're looking to make additions to your IRAs. SPDR S&P Dividend ETF (SDY)Source: Shutterstock Expense ratio: 0.35% per year, or $35 on a $10,000 investment.Some of the best retirement ETFs are dividend funds. The SPDR S&P Dividend ETF (NYSEARCA:SDY), one of the largest U.S. dividend ETFs, is a solid place to start, particularly for dividend investors looking for steadily rising payouts. The $19.77 billion SDY tracks the S&P High Yield Dividend Aristocrats Index, which requires member firms to have minimum dividend increase streaks of 20 years.There are plenty of dividend-paying stocks in the U.S. and many of the best ETFs hold those stocks, but requiring two decades of higher payouts helps investors identify the cream of the dividend crop. As such, SDY is home to just 111 stocks. For long-term investors, dividends are an integral part of their outcomes."Over the past 30 years, dividends from S&P 500 stocks have, on average, contributed exactly half of the index's total return on an annual basis," according to State Street research. "While price returns of equities can fluctuate year over year, dividends tend to be more stable, consistently offering a positive contribution to total return each year."SDY, which yields 2.39%, allocates nearly 34% of its combined weight to the industrial and financial services sectors. iShares Edge MSCI USA Quality Factor ETF (QUAL)Source: Shutterstock Expense ratio: 0.15%The quality factor makes a lot of sense for investors of all skill levels, but with this current bull market aging by the day, novice investors, in particular, may want to consider quality stocks. The iShares Edge MSCI USA Quality Factor ETF (CBOE:QUAL) is one of the best ETFs for accessing a broad basket of domestic stocks with the quality designation.The $11.30 billion QUAL, which holds 125 stocks, defines quality with the following metrics: return on equity, earnings variability and debt-to-equity. Long-term performance data indicate that the quality factor not only provides substantial upside capture in bull markets, but reduces some of the downside often experienced in bear markets. * 5 Stocks to Sell in May Before Investors Go Away "Quality strategies seek enhanced returns versus the market through exposure to profitable companies with less debt and more stable earnings," according to BlackRock. "Since the Quality factor has historically delivered more upside capture with less downside resilience, it may be more appropriate for risk-aware, return seeking investors." Xtrackers USD High Yield Corporate Bond ETF (HYLB)Source: Shutterstock Expense ratio: 0.15%Bonds are an important part of the retirement asset class mix and fixed income funds are among the best ETFs for consideration in IRAs. Conventional wisdom dictates that older investors may want to shy away from riskier fixed income investments, but younger investors with the luxury of more time can consider high-yield corporate debt. For cost-conscious investors, the Xtrackers USD High Yield Corporate Bond ETF (NYSEARCA:HYLB) is one of the best ETFs in the junk bond space to consider.HYLB, which tracks the Solactive USD High Yield Corporates Total Market Index, debuted in late 2016 with an expense ratio 0.15%. Proving the usefulness of low fees, HYLB is now home to more than $2.8 billion in assets under management and has forced some rivals to cut fees on junk bond ETFs or create comparably-priced funds.HYLB holds over 1,000 bonds and has a yield to worst of 6%. Over 90% of the fund's holdings are rated BB or B, but it does have a 6% weight to speculative CCC-rated debt. Vanguard FTSE Developed Markets ETF (VEA)Source: Shutterstock Expense ratio: 0.05%Some of the best ETFs for IRAs are international equity funds, something investors should remember because many are often over-allocated to domestic equities. Fortunately, some of the best ETFs for international exposure are also some of the cheapest. That includes the Vanguard FTSE Developed Markets ETF (NYSEARCA:VEA).In fact, VEA's already modest fee was recently pared to 0.05% from 0.07%. Home to $72.52 billion in assets under management, VEA is not just the largest international ETF trading in the U.S., it is the sixth-largest ETF of any variety. This is also one of the best ETFs for investors looking for a big basket of stocks as VEA is home nearly 4,000 holdings. * Mother's Day 2019: 10 High-Tech Gifts Your Mom Will Love Japan and the U.K. combine for almost 37% of VEA's geographic exposure while Canada and France combine for 17.10%. Over the past three years, VEA has modestly outpaced the MSCI EAFE Index with slightly less volatility. iShares Core MSCI Emerging Markets ETF (IEMG)Source: Shutterstock Expense ratio: 0.14%Keeping with the theme of international equity exposure, emerging markets funds are among the best ETFs for risk-tolerant retirement planners and younger investors with lengthy time horizons. The iShares Core MSCI Emerging Markets ETF (NYSEARCA:IEMG) confirms that some of the best ETFs in the emerging markets space are also inexpensive.In terms of superficial superlatives, IEMG is the second-largest emerging markets ETF trading in the U.S. and one of the least expensive. IEMG targets the MSCI Emerging Markets Investable Market Index and has been one of the top ETFs in terms of new assets added over the past several years.IEMG holds over 2,200 stocks and its three-year standard deviation of just under 13% is palatable for many investors. Making emerging markets solid ideas for long-term investors are the depressed valuations seen in many of developing economies coupled with still robust economic growth expectations.More than 15 countries are represented in IEMG, but China is the dominant geographic exposure at 30.74%, a percentage that is likely to increase later this year when MSCI adds more Chinese A-shares to its international indexes.Todd Shriber does not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 10 Best Stocks to Buy for May * 5 Elephant-Sized Companies Warren Buffett Could Buy * 7 Cheap ETFs for Novice Investors Compare Brokers The post 5 of the Best Retirement ETFs for Your IRA appeared first on InvestorPlace.
Buyback ETFs top the dividend growth ones of late. But things might change ahead with the saturation of benefits from the tax cuts. Therefore, investors can play these high dividend ETFs.
Millennial investors were more likely than investors in other age groups to own exchange-traded funds, according to a survey from investment provider BlackRock. Among investors age 21 to 35, 42% said they owned ETFs in 2017, up from 33% of investors in that same age group who said they had ETFs in their portfolios the year prior. Given that ETFs are a new(er) investment innovation, it's probably not surprising that the youngest investors would embrace them. What's unexpected, however, is just how much ETFs have found a home in the portfolios of what BlackRock calls “Silver”-aged investors--people over age 70.
A slew of dividend exchange traded funds (ETFs) have recently been hitting all-time highs, including the SPDR S&P Dividend ETF (NYSEArca: SDY). SDY is up just over 13% this year. SDY, one of the largest ...