Top Dividend ETFs For December
Although December has largely continued the rally that November left off, sentiment is still largely mixed with significant headwinds. Despite the robust gains due to election clarity and vaccine news, we as a society are not out of the woods yet. The rapid rise in COVID cases, deaths, and hospitalizations have now exceeded the initial wave in the spring, businesses are shutting down again, and there is still zero stimulus package. Furthermore, there may be some complications with the distribution and supply chain of Pfizer’s PFE vaccine-candidate. Although investors do not seem to be overly concerned, if November’s jobs report showed us anything, it’s that this economic recovery is far from over. Although markets long-term usually go up, and “think forward,” in the short-term, these are investment vehicles that behave emotionally, irrationally, and will “sell the news.” One of the ways that investors can cope with the uncertain and unpredictable market climate is by investing in ETFs that focus on quality dividend paying companies. This is a strategy that offers investors investable indexes with broad exposure and consistent income streams. While many investors have concerns, Q.ai’s deep learning algorithms have identified several Top Dividend ETFs based on 90-day, 30-day, and 1-week fund flows. While our rating system usually includes Top Buys, Attractive, Neutral, Unattractive, and Top Shorts, this month, we have only three ETFs rated as Neutral, and one rated a Top Short. We have also included several unrated ETFs to be mindful of.
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iShares Core Dividend Growth ETF (DGRO)
The first of the Neutral rated Top Dividend ETFs, is the iShares Core Dividend Growth ETF DGRO . This ETF aims to track an index composed of US stocks that have a proven history of growing dividends consistently. Its top holdings include companies such as Verizon VZ , Microsoft MSFT , Johnson and Johnson, Apple AAPL , and JP Morgan. The ETF currently has $14,040,218,137.20 AUM, and has had consistently strong fund flows. It has a 90-day fund flow of $1,106,371,940.00, 30-day fund flow of $727,970,605.00, and 1-week fund flow of $281,974,850.00. Its net expense ratio of .08% is also very reasonable.
WisdomTree U.S. Large Cap Dividend Fund (DLN)
Next on the list of Neutral rated Top Dividend ETFs, is the WisdomTree U.S. Large Cap Dividend Fund DLN . This ETF tracks an index made up exclusively of US Large Cap companies that pay strong dividends. In terms of AUM, the ETF is on the smaller side with $2,530,903,216.24 AUM. The ETF has seen positive fund flows, with a fund flow of $40,275,752.35 over the last 90-days, a fund flow of $25,681,519.15over the last 30-days, and a fund flow of $5,270,603.25 over the last week. Its net expense ratio of .28% is pricier compared to other similar ETFs.
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Vanguard Dividend Appreciation ETF (VIG)
The last Neutral ETF for this month is the Vanguard Dividend Appreciation ETF VIG . With top holdings consisting of companies such as Walmart WMT , Microsoft, Procter & Gamble PG , Johnson & Johnso JNJ n, and Visa, this ETF focuses on US companies that have a track record of growing their dividends year over year. The company has $52,036,644,208.56 AUM, and has seen positive fund flows. Its 90-day fund flow is $1,533,549,530.07, its 30-day fund flow is $572,822,123.77, and its 1-week fund flow is $11,564,698.90. Its net expense ratio of .08% is very reasonable.
ProShares S&P 500 Aristocrats ETF (NOBL)
Our sole Top Short for the month is the ProShares S&P 500 Aristocrats ETF NOBL . This is a very uniquely structured ETF because its only holdings are companies within the S&P 500 that have raised their dividends for at least 25 years in a row. This is a highly rated and highly respected ETF, with none of its top holdings holding any more than 2% of weight in the ETF. Its major holdings include stocks such as Target TGT , Sysco SYY , Proctor and Gamble, and Lowe’s LOW . The ETF is on the smaller side and currently has $6,882,774,949.39 AUM. It has had strong fund flows, with a $120,840,465.00 90-day fund flow, $83,652,610.00 30-day fund flow, and $63,619,295.00 1-week fund flow. Its 0.35% net expense ratio is pricier compared to other ETFs on this list.
Other ETFs (Unrated)
iShares Core High Dividend ETF (HDV), iShares Select Dividend ETF (DVY)
Two more dividend ETFs on our list that were not assigned a rating are the iShares Core High Dividend ETF HDV and iShares Select Dividend ETF DVY . Both the iShares Core High Dividend ETF and iShares Select Dividend ETF focus on tracking an index of relatively high dividend paying U.S. stocks. While the iShares Core High Dividend ETF has $5,829,134,091.20 AUM, the iShares Select Dividend ETF has $14,502,011,612.00. Both ETFs have seen mixed fund flows. The iShares Core High Dividend ETF has seen fund flows of $-51,346,550.00 over the last 90-days, $45,331,605.00 over the last 30-days, and $30,807,635.00 over the last week, while the iShares Select Dividend ETF has seen fund flows of $-92,995,540.00 over the last 90-days, $210,660,470.00 over the last 30-days, and $52,506,825.00 over the last week. The iShares Core High Dividend has a much better net expense ratio than the iShares Select Dividend ETF, with a ratio of 0.08% compared to 0.39%.
SPDR S&P Dividend ETF (SDY), Vanguard High Dividend Yield ETF (VYM)
The next two dividend ETFs on our list that were not assigned a rating are the SPDR S&P Dividend ETF and Vanguard High Dividend Yield ETF VYM . While the SPDR S&P Dividend ETF focuses on the highest dividend yielding S&P stocks that have consistently increased dividends for at least 20 years in a row, the Vanguard High Dividend Yield ETF aims to hold high dividend paying US companies, weighted by market cap. They do not, however, hold any REITS. The SPDR S&P Dividend ETF holds $16,854,133,410.62 AUM, compared to $30,552,184,019.16 AUM for the Vanguard High Dividend Yield ETF. The SPDR S&P Dividend ETF has seen mixed fund flows, with a fund flow of $-167,637,074.00 over the last 90-days, $116,685,393.95 over the last 30-days, and $-42,244,209.75 over the last week. In comparison, the Vanguard High Dividend Yield ETF has consistently positive fund flows with a 90-day fund flow of $1,154,461,961.94, 30-day fund flow of $529,975,146.03, and 1-week fund flow of $45,915,085.06. The SPDR S&P Dividend ETF has a considerably less attractive net expense ratio of 0.35% compared to the net expense ratio of 0.06% for the Vanguard High Dividend Yield ETF.
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