Dividend Aristocrats ETFs To Tap Amid Soaring COVID-19 Cases

Why Choose Dividend Aristocrats ETFs?

Dividend aristocrats are the blue-chip dividend-paying companies with a long history of increasing dividend payments year over year. Moreover, the dividend aristocrat funds provide investors with dividend growth opportunities in comparison to the other products in the space but might not necessarily have the highest yields.

‘Dividend aristocrats’ or ‘dividend growers’ are mostly deemed to be the smartest way to deal with market turmoil. Notably, the inclination toward dividend investing has been rising due to easing monetary policy on the global front, and market uncertainty triggered by the pandemic and deceleration in global growth. The demand for these funds is mostly driven by their characteristic of being the major source of consistent income for investors when returns from the equity markets are uncertain.

These products also result in a strong portfolio, with a higher scope of capital appreciation as against the simple dividend-paying stocks or those with high yields. As a result, these products deliver a nice combination of annual dividend growth and capital-appreciation opportunity and are mostly good for risk adverse long-term investors.

Against this backdrop, let’s take a look at some ETFs that investors can consider:

Vanguard Dividend Appreciation ETF (VIG Quick Quote VIG - Free Report)

This is the largest and the most popular ETF in the dividend space with AUM of $58.57 billion. The fund follows the NASDAQ US Dividend Achievers Select Index, composed of high-quality stocks, with a record of raising dividends every year. It charges 6 basis points (bps) in annual fees.

SPDR S&P Dividend ETF (SDY Quick Quote SDY - Free Report)

This fund seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P High Yield Dividend Aristocrats Index. The index screens for companies that have consistently increased their dividend for at least 20 consecutive years, and weights the stocks by yield. The fund has AUM of $19.11 billion. It charges 35 bps in fees per year.

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