Dividends may not be the most exciting part of the investing world, but they can prove their worth when called upon. That time may be now, as uncertainty looms over markets. Rate cuts, which excited investors so much in the back half of 2024, may be less certain to start 2025. What’s more, shifting government policies, including potential tariffs, could harm market-leading segments in tech. In that scenario, leaning on durable dividend-paying firms via a dividend growth ETF like TDVG may bolster portfolios.
See more: Steady as She Goes for Markets? Don’t Ignore High-Conviction Investments
The T. Rowe Price Dividend Growth ETF (TDVG ) actively invests in primarily in large-cap firms with above-average, sustainable dividend and earnings growth. Charging merely a 50 basis point fee, the research-driven strategy assesses firms based on a few key metrics. Specifically, TDVG looks for stocks with competitive dividend yields, strong balance sheets and cash flow levels, attractive valuations, and sustainable competitive advantages.
The active dividend growth ETF holds some of those large market leaders like Microsoft (MSFT) but also other solid firms like GE Aerospace (GE). Leaning on T. Rowe Price’s fundamental research capabilities, the ETF can provide closer scrutiny of potential investments than rival passive funds can.
What’s more, by assessing firms not only based on earnings but also dividends, TDVG can find potentially more durable firms. Those durable dividend-paying firms are sending a message about their own internal outlook via the health of their dividend payouts. That, along with other fundamental analyses, can produce an all-around stronger portfolio of investments in the ETF.
With its active adaptability and focus on current income, the active dividend growth ETF offers a powerful option. TDVG has returned 13.45% over the last year, per T. Rowe Price data. For those looking for a strategy offering dividend income from dividend-paying firms and equity upside, the fund may be worth a closer look.
For more news, information, and analysis, visit our Active ETF Channel.
