Investment Thesis
It takes a lot of work to design a dividend ETF that will perform relatively well in all market environments. These funds need to consistently select companies that not only are likely to grow their
DGRW: A Leading Contender For The Closet Indexing Award
Summary
- DGRW's returns are nearly identical with the S&P 500, though I'm expecting it to be slightly less risky this year.
- However, its forward yield of 2.20% isn't exciting, it's more concentrated than the S&P 500, and it's more expensive.
- WisdomTree's Performance Attribution Tool shows the strategy benefitting from a high allocation to Consumer Staples stocks, so I think DGRW is due for a short-term boost.
- Still, in the long run, DGRW is just an S&P 500 alternative, so I'm struggling to see how it can fit in an active investors' portfolio.
The Sunday Investor has completed all the educational requirements for the Chartered Investment Manager designation and is on track to become a licensed options and derivatives trading advisor. Focusing on U.S. Equity ETFs, The Sunday Investor maintains a comprehensive ETF Database that tracks the performance and fundamentals for nearly 1,000 funds. He is active in the comments section and ready to answer questions about any ETF you might considering.
Analyst’s 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.
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