have dividend yields higher than the S&P 500 index. And many of them double-digit earnings growth potential once the economy picks up steam.
Investors could consider TDIV, which seeks to focus on dividend payers within the technology sector. For being included in the index, apart from meeting minimum market cap and liquidity requirement, the security should have paid a dividend and not decreased its dividend within the past 12 months.
The index employs a modified dividend value weighting methodology and the current top holdings of the fund are Microsoft, Intel, Cisco, IBM and Apple. The ETF has a dividend yield of 2.16% currently and charges an expense ratio of 50 basis points.
Vanguard Dividend Appreciation ETF (NYSEARCA:VIG)
VIG holds stocks of high quality companies that have a record of increasing dividends for at least 10 years. Launched in April 2006, the fund is now the largest dividend ETF, with $19.1 billion in AUM. With its high quality holdings and focus on dividend growth, this ETF has been an excellent performer in the past and will most likely continue to outperform.
The fund is currently home to 143 securities, with top allocations to Pepsi, Coke and P&G. The ETF is heavily weighted towards Consumer Goods (24%), Industrials (21%) and Consumer Services (17%) sectors.
While the fund doesn’t have a large exposure to Financials (8%) and Technology (5%) sectors as of now, it is likely to benefit from its high exposure to consumer related and industrials sectors in view of their brightening outlook. Further it has very low allocations to utilities (1%) and telecom (0.1%) sectors.
With an expense ratio of 0.10%, this is one of the cheapest funds in this space. The dividend yield at 2.06% is not remarkable, but this fund is better suited for investors who seek long-term capital appreciation along with income and not just high current yield.
This article is brought to you courtesy of Neena Mishra From Zacks.