On the other hand, the ETF does look to be a little pricier when compared to other large cap-focused options, while it could be a bit more volatile. And as we discussed earlier, the fund could skew away from several key sectors—health care and technology combine to account for less than 10% of the total—so it may be a poor broad market play for some.
Competition and Bottom Line
Investors should also note that the product has a large amount of competition, from a number of funds. While there isn’t much in the way of revenue-weighted foes, there are several dividend-centric products out there to consider.
These include the Vanguard High Dividend Yield ETF (NYSEARCA:VYM), the iShares High Dividend ETF (NYSEARCA:HDV), and the WisdomTree LargeCap Dividend ETF (NYSEARCA:DLN), just to name a few. All of these funds have more than $1.5 billion in AUM, and plenty of volume too, so they could make RDIV’s quest for adding assets quite difficult (see4 Excellent Dividend ETFs for Income and Stability).
However, investors continue to embrace high yield products, especially if they offer up a new take on the space. RDIV does just that so this fund—should it show some level of outperformance and keep its yield near 5%– should have a decent shot at becoming a popular ETF as well.
This article is brought to you courtesy of Eric Dutram.