Top Dividend ETFs For October
After markets experienced a dreadful September, October entered the picture with a strong start. After three consecutive positive weeks, however, sentiment has shifted and investors are becoming increasingly nervous. Stimulus talks appear dead until after the election, COVID is surging to record numbers, and investors are nervous about election uncertainties. Investors are also fearful of a double-dip recession if further global lockdowns occur. While there is some sliver of optimism with strong earnings and economic data, there is simply too much uncertainty for investors to be unequivocally bullish. One of the ways that investors can cope with the current 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 are concerned about these unpredictable markets, 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 one ETF rated Top Buy, and three rated Neutral. We have also included several unrated ETFs to be mindful of.
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Vanguard Dividend Appreciation ETF (VIG)
The first and only Top Buy ETF is the Vanguard Dividend Appreciation ETF VIG . With top holdings consisting of companies such as Walmart WMT , Microsoft MSFT , Procter & Gamble, Johnson & Johnson, and Visa, this ETF focuses on U.S. companies that have a track record of growing their dividends year over year. The company has $48,318,009,014.22 AUM, and has seen marginally positive fund flows. Its 90-day fund flow is $1,056,561,616.89, its 30-day fund flow is $284,487,778.82, and its 1-week fund flow is $71,427,992.86. Its net expense ratio of .08% is very reasonable.
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 U.S. stocks that have a proven history of growing dividends consistently. Its top holdings include companies such as Verizon VZ , Microsoft, Johnson and Johnson JNJ , Apple AAPL , and JP Morgan. The ETF currently has $12,122,578,825.50 AUM, and has had consistently strong fund flows. It has a 90-day fund flow of $639,013,230.00, 30-day fund flow of $205,149,650.00, and 1-week fund flow of $90,079,890.00. 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 U.S. Large Cap companies that pay strong dividends. In terms of AUM, the ETF is on the smaller side with $2,310,115,315.74 AUM. The ETF has seen mixed fund flows, with a negative fund flow of $-256,476.65 over the last 90-days, a positive fund flow of $19,502,811.40 over the last 30-days, and a 1-week fund flow of $-33,125.90. Its net expense ratio of .28% is pricier compared to other similar ETFs.
ProShares S&P 500 Aristocrats ETF (NOBL)
Our final Neutral ETF 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 , Sysc SYY o, Proctor and Gamb PG le, and Lowe’s LOW . The ETF is on the smaller side and currently has $6,317,158,648.76 AUM. It has had strong fund flows, with a $5,375,235.00 90-day fund flow, $11,020,235.00 30-day fund flow, and $7,449,730.00 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 dividends 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 $5,284,284,409.60 AUM, the iShares Select Dividend ETF has $12,803,355,921.60. Both ETFs have seen negative fund flows over the last 90-days, 30-days, and 1-week. The iShares Core High Dividend ETF saw fund flows of $-170,852,550.00 over the last 90-days, $-60,936,530.00 over the last 30-days, and $-20,221,055.00 over the last week, and the iShares Select Dividend ETF saw fund flows of $-581,999,285.00 over the last 90-days, $-177,570,940.00 over the last 30-days, and $-43,219,085.00 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 dividends 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 U.S. companies, weighted by market cap. They do not, however, hold any REITS. The SPDR S&P Dividend ETF has $15,369,354,952.87 AUM, compared to $27,027,261,978.50 AUM for the Vanguard High Dividend Yield ETF. The SPDR S&P Dividend ETF has seen consistently negative fund flows, with a fund flow of $-466,148,196.10 over the last 90-days, $-171,567,910.65 over the last 30-days, and $-38,867,446.95 over the last week. In comparison, the Vanguard High Dividend Yield ETF has consistently positive fund flows with a 90-day fund flow of $465,326,085.22, 30-day fund flow of $200,611,929.40, and 1-week fund flow of $113,321,604.67. 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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