HDV - HDV: Less Volatile Dividend ETF With Diverse Holdings

2024-05-01 05:35:20 ET

Summary

• iShares Core High Dividend ETF offers stability in dividend income and is suitable for retirees prioritizing income generation.
• The outlook for interest rate cuts has changed, but HDV still provides value as a dividend growth play.
• HDV's holdings have shifted, with energy and healthcare stocks presenting an opportunity for growth.
• The ETF still lacks a sufficient exposure to the tech industry, so growth prospects aren't as strong.

Overview

I previously covered iShares Core High Dividend ETF ( HDV ) and made the mistake of giving it a Hold rating. When I initially covered it, I thought it lacked growth prospects because of the way the holdings were structured. While this still has some truth to it, I have now shifted my outlook due to the changing rate environment, utility for retirees, and stability in dividend income the fund offers. We can see that since my initial coverage, HDV has outperformed Schwab's U.S. Dividend Equity ETF ( SCHD ) by a slight margin. I've included the S&P 500 ( SPY ) as a reference point, but I imagine that those looking to prioritize some income aren't too focused on trying to outperform the S&P....

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