The iShares Core Dividend Growth ETF (DGRO), meanwhile, prioritizes dividend growth over current dividend yield by seeking to track an index of high-quality companies that have a history of increasing their dividends. And while we strive to keep fees low on all our ETFs, currently, DIVB is the lowest-cost dividend ETF in the U.S. So, while many dividend ETFs may have little exposure to traditional growth sectors, technology is currently a top sector in DIVB. 5 The index DIVB seeks to track is designed to keep sector weights aligned with the broad market. Currently, DIVB invests in over 400 stocks vs. stocks with a track record of dividend payments and/or share buybacks, another way corporations can return cash to shareholders. The iShares Core Dividend ETF (DIVB), on the other hand, focuses on U.S. equities and tends to skew toward stocks in traditional dividend-paying sectors such as energy and healthcare. When doing so, it’s important to understand not all dividend ETFs are created equal - and that’s by design.įor example, the iShares Core High Dividend ETF (HDV) seeks to track an index of relatively high-dividend-paying U.S. Rather than taking the risk of picking individual dividend-paying stocks, investors may want to consider exchange-traded funds (ETFs) which focus on dividend paying companies. In 2023, investors may continue to seek companies with relatively stable and mature businesses with the ability to generate cashflow even in a more-challenging macroeconomic environment. Dividend-paying stocks can help diversify your sources of income, while providing potential upside. With bond yields up dramatically in the past 12 months, it may be tempting to think “ Why do I need dividends?”Īn answer is that bonds have downside risk too, as we saw in 2022.
But we believe dividend-paying stocks play a key role in portfolios, especially for investors at or near retirement.
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