Four Ways To Grow Dividends With ETFs

Vanguard Dividend Appreciation ETF (NYSEARCA:VIG)

This is the largest and most popular ETF in the dividend space with AUM of $17.45 billion and average daily volume of more than 1.1 million shares. The fund follows the Dividend Achievers Select Index, which is composed of stocks of high quality companies that have a record of increasing dividends for at least 10 years.

Holding 146 stocks in its basket, the product is pretty spread out across various securities as none holds more than 4% of total assets. PepsiCo (PEP), Procter & Gamble (PG) and Wal-Mart Stores (WMT) are the top three elements in the basket. However, from a sector look, the ETF is heavily weighted toward consumer goods (23%), industrials (22%) and consumer services (16.50%).

With an expense ratio of 0.10%, VIG is one of the cheapest funds in this space. The 30-day SEC yield comes at 2.11%. The fund has gained nearly 21.2% in the year-to-date time frame (read: 4 Unbeatable ETF Strategies for Q4).

WisdomTree U.S. Dividend Growth ETF (NASDAQ:DGRW)

This fund tracks the WisdomTree U.S. Dividend Growth Index and offers diversified exposure to 294 dividend-paying stocks from various sectors with growth characteristics. It has gathered $56.1 million in AUM since its debut earlier in the year and it trades in volumes of nearly 43,000 shares per day.

The product provides double-digit allocation to four sectors – industrials (20.62%), information technology (20.49%), consumer discretionary (19.79%) and consumer staples (18.09%). Apple (AAPL), Microsoft (MSFT) and PG are the top three holdings making up for a combined 12.82% share.

The fund has a 30-day SEC yield of 2.04% and charges 28 bps in fees per year from investors. DGRW is up 8.4% since inception.

First Trust NASDAQ Technology Dividend Index (NASDAQ:TDIV)

Since the technology sector is expected to be a major contributor to the overall increase in dividends, investors could find TDIV an intriguing option. This fund seeks to focus on dividend payers within the technology sector by tracking the Nasdaq Technology Dividend Index.

The fund has accumulated $215.2 million in its asset base and trades in volume of roughly 92,000 shares a day on average. In total, the fund holds 87 securities in its basket. Intel (INTC), MSFT and International Business Machines (IBM) occupy the top three positions in the basket with nearly 24% of assets.

In terms of sector exposure, about one-fourth of the portfolio is tilted toward semiconductor and semiconductor equipment while software, and computer and peripherals make up for 14% share each.

The ETF sports a 30-day SEC yield of 2.90% and has an expense ratio of 0.50%. TDIV gained 20% so far this year.

This article is brought to you courtesy of Eric Dutram.

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