SDY - DIVB: Strong Holding Diversity With A Focus On Tech

2024-06-26 11:17:40 ET

Summary

• iShares Core Dividend ETF provides majority tech exposure while maintaining a high dividend growth and consistent returns.
• DIVB's strategy focuses on holding mostly US-based companies that return capital to shareholders through dividends and buybacks.
• DIVB's low starting yield of 2.8% is offset by high dividend growth, making it ideal for long-term investors looking to compound income.

Overview

A lot of dividend ETFs have a structure and strategy that leans on a portfolio of exposure to businesses that have cash flows that are easy to estimate, with slow but consistent growth. This includes industries like utilities, energy, or even consumer staples. These industries are where a lot of dividend aristocrats or dividend kings remain, since the cash flows received from these businesses are so steady. As a result of this focus, the technology sector usually gets a very tiny allocation since tech companies aren't typically known for their high dividend growth as they instead choose to reinvest their earnings back into the business....

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