7 Dividend ETFs That Offer Growth In 2020

In a low-interest-rate environment, dividend investing has been the hot spot and seems an excellent choice for 2020. Though the strategy doesn’t offer dramatic price appreciation, it is a major source of consistent income for investors in any type of market.

Below we highlight some solid reasons to invest in this strategy:

Uneven Stock Market Rally

The stock market is currently hitting new record highs but 2020 is likely to be filled with volatility backed by Middle East tensions, trade uncertainty, and U.S. presidential election. The dividend-focused products offer safety in the form of payouts and stability in the form of mature companies that are less volatile to large swings in stock prices.

Additionally, the Fed vowed to keep interest rates steady in 2020 after three rates cut last year. This has raised the appeal for dividend strategies.

Dividend Payout to Top $500 Billion

The companies on the S&P 500 are expected to return more money to shareholders through dividends than ever this year. Per Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, the dividend payout is expected to top $500 billion for the first time. At least 330 companies on the index are expected to raise their dividends based on their history and financial condition. Among the companies that recently announced plans to raise their dividends are Pfizer Inc. (PFE - Free Report), Abbott Laboratories (ABT - Free Report) and AT&T Inc (T - Free Report).

Notably, the first quarter is typically the busiest period for dividends as companies roll out their annual results and reward shareholders ahead of their annual meetings.

Solid Inflow in Q4

Investors have been showing interest in dividend strategies. In the fourth quarter, they added more than $10 billion in new money to dividend-focused ETFs, the highest period of inflows for 2019, according to Todd Rosenbluth, head of ETF and mutual-fund research at CFRA.

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