ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Dividend Channel
  2. Instead of Chasing Dividends, Depend on DIVS
Dividend Channel
Share

Instead of Chasing Dividends, Depend on DIVS

Tom LydonJul 21, 2022
2022-07-21

Whether it’s dividend chasing or simply a case of investors looking for income beyond bonds and for a less volatile equity frontier, market participants are embracing dividend funds, including exchange traded funds, in a big way in 2022.

As of late June, dividend funds have hauled in $43 billion in new capital from investors on a year-to-date basis. That’s a big number that could certainly grow larger in the back half of 2022, particularly if inflation remains high and interest rates continue rising.

It’s also a reminder that investors need to be judicious when allocating to dividend ETFs. That can be accomplished with the SmartETFs Dividend Builder ETF (DIVS C+). A primary reason that DIVS fits the bill as a selective choice among dividend ETFs is that the fund is actively managed whereas the bulk of its competitors are index-based strategies.

“Historically, dividends have significantly contributed to an asset’s total return, sometimes providing a boost during economic downturns,” reported Kate Dore for CNBC. “From 1973 to 2021, companies paying dividends earned a 9.6% total annual return, on average, beating 8.2% from the S&P 500 Index, and eclipsing the 4.79% yield from non-dividend payers, according to a 2022 Hartford Funds study.”

To the point regarding dividends’ long-term contribution to overall portfolio performance, DIVS is a relevant consideration because it leans into payout growth, not yield. While high-dividend strategies, many of which are rooted in yield weighting, are performing well this year, stocks with high yields can ultimately become dividend offenders.

As an actively managed ETF, DIVS has the potential to keep investors clear of companies that could lower or suspend payouts.

“While a higher dividend payout may be appealing during a flat or down market, it’s important to assess what you’re buying before adding new assets to your portfolio,” according to CNBC. “Some companies, known as the ‘dividend aristocrats,’ have a history of increasing dividends annually, even during previous recessions. And many companies are slow to cut dividends, providing some investors with reliable cash flow.”

While DIVS isn’t explicitly dedicated to dividend aristocrats, nor does it focus on dividend increase streaks, it leverages quality attributes to create a basket of companies with potentially dependable dividend growth possibilities. Additionally, due to its roots as a dividend fund, DIVS is applicable for tax-advantaged accounts, indicating that it’s a viable consideration for advisors to discuss with clients.

For more news, information, and strategy, visit the Dividend Channel.

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X