The Invesco Dividend Achievers ETF Badly Needs A Makeover

Summary

  • The Broad Dividend Achievers are an impressive group of companies on paper, but the Index has become bloated with underperformers in recent years.
  • Requiring ten years of consecutive dividend growth is outdated; such an arbitrary number should not be used to predict future performance, especially if no financial health screens are used.
  • Compared with the S&P 500, PFM currently has less exposure to Tech and Communication Services and more exposure to Consumer Staples and Industrials.
  • The fund's high expense ratio of 0.53% is the final nail in the coffin for this dividend ETF given how there are many other low-cost options available.
Puzzle with WHAT"S MISSING Phrase - 3D Rendering
Photo by porcorex/iStock via Getty Images

Investment Thesis

The Invesco Dividend Achievers ETF (NASDAQ:PFM) is losing its cachet. Ten years of dividend growth isn't as impressive as it was five years ago, considering its constituents spent much of the last decade easily growing dividends in the longest

This article was written by

The Sunday Investor profile picture
4.24K Followers
Build sustainable portfolio income with premium dividend yields up to 10%.

I perform independent fundamental analysis for over 850 U.S. Equity ETFs and aim to provide you with the most comprehensive ETF coverage on Seeking Alpha. My insights into how ETFs are constructed at the industry level are unique rather than surface-level reviews that’s standard on other investment platforms. My deep-dive articles always include a set of alternative funds, and I am active in the comments section and ready to answer your questions about the ETFs you own or are considering.

My qualifications include a Certificate in Advanced Investment Advice from the Canadian Securities Institute, the completion of all educational requirements for the Chartered Investment Manager (CIM) designation, and a Bachelor of Commerce degree with a major in Accounting. In addition, I passed the CFA Level 1 Exam and am on track to become licensed to advise on options and derivatives in 2023. In November 2021, I became a contributor for the Hoya Capital Income Builder Marketplace Service and manage the "Active Equity ETF Model Portfolio", which as a total return objective. Sign up for a free trial today! Hoya Capital Income Builder.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Recommended For You

Comments

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.