2023-05-24 12:29:28 ET
WisdomTree argued that dividend-based investments may be a point of interest for certain market participants as Wall Street continues to face uncertain conditions, given the lack of clarity about the debt ceiling, the overall health of the economy and the near-term future of interest-rate policy.
"Given the current macro uncertainty, we still believe in anchoring portfolios to high-quality dividend payers with attractive levels of income," the asset manager stated in a note to clients release late Tuesday evening.
The firm added : “We think anchoring to companies with strong fundamentals, attractive levels of income and cheap valuations may be a solid option over the next 12–18 months.”
Wisdom Tree outlined that the dispersion between the S&P 500 and the S&P 500 equal weight index has hit some of its most stretched out levels in over the past five years. This has come about as a concentrated handful group of names have been the clear drivers of returns in the benchmark indexes.
See a graphic below:
For reference, the S&P 500 ( SP500 ) and its benchmark tracking ETFs SPDR S&P 500 ETF Trust ( SPY ), Vanguard S&P 500 ETF ( VOO ) and the iShares Core S&P 500 ETF ( IVV ) are all up on the year by roughly 7% , whereas the Invesco S&P 500 Equal Weight ETF ( RSP ), which proportionately allocates its capital across all of its holdings, is lower in 2023 by 0.6% .
For investors who agree with WisdomTree's view on dividend investing but want a diversified approach, here are some of prominent dividend ETFs:
- WisdomTree U.S. High Dividend strategy ( NYSEARCA: DHS )
- Vanguard Dividend Appreciation ETF ( NYSEARCA: VIG )
- Vanguard High Dividend Yield Index ETF ( NYSEARCA: VYM )
- Schwab US Dividend Equity ETF ( SCHD )
- iShares Core Dividend Growth ETF ( DGRO )
- iShares Select Dividend ETF ( NASDAQ: DVY )
More on Dividend Investing:
- Dividend Corner: Is Chevron a good dividend stock amid uncertainty about oil and the debt ceiling?
- 5 High Dividend Yield Companies To Generate Extra Income And Reduce Portfolio Volatility
- May's 5 Dividend Growth Stocks With 6.08%+ Yields
For further details see:
WisdomTree: Consider dividend investing in the current macro uncertainty