A Look At The Energy Sector Impact On Dividend ETFs

I continue to own VYM as a core equity income holding in my Strategic Income portfolio.

Despite its flat performance so far this year, the diversified basket of over 430 dividend paying stocks offering attractive value characteristics and a dependable 30-day SEC yield of 3.26%. In addition, the ultra-low 0.10% expense ratio keeps overall portfolio fees to a minimum.

The Bottom Line

One of the most important exercises that individual investors can do is analyze the index construction of their ETF holdings.

Take note of any sectors that your funds are overweight or underweight in order to gauge how they will react under different circumstances. That way you are prepared in the event that a significant divergence occurs and can make adjustments as necessary.

In addition, it’s important to re-evaluate the portfolio on a quarterly or semi-annual basis.

These funds undergo regular rebalancing and may shift their exposure based on the mandate of the index provider.

This article is brought to you courtesy of David Fabian from FMD Capital Management.

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