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In this episode of ETF Spotlight, I speak with Kieran Kirwan, Director, Investment Strategy at ProShares about dividend growth and high-income strategies.
Dividend-paying stocks have been out of favor lately. Most investors have piled into growth stocks, particularly mega-cap tech stocks, while dividend payers are traditionally more mature companies in old economy sectors.
Further, with rising interest rates, money market funds and short-term bonds have become more attractive for income-seeking investors.
There are two popular approaches to dividend investing: dividend growth stocks and high dividend stocks. Dividend growers are usually high-quality companies with solid balance sheets and stable cash flows.
The ProShares S&P 500 Dividend Aristocrats ETF (NOBL - Free Report) holds high-quality companies that have grown their dividend for at least 25 consecutive years. The ProShares S&P Technology Dividend Aristocrats ETF (TDV - Free Report) holds technology companies that have consistently raised their dividends for at least seven years.
The Vanguard Dividend Appreciation ETF (VIG - Free Report) and the iShares Core Dividend Growth ETF (DGRO - Free Report) also hold high-quality companies with a history of consistent dividend growth.
Covered-call ETFs that use options strategies to generate exceptionally high yields have been immensely popular over the past couple of years. In addition to high yields, these strategies generally reduce portfolio volatility.
Investors should, however, remember that these strategies work best in sideways markets but underperform in strong bull markets. They do provide some protection when stocks fall.
The ProShares S&P 500 High Income ETF (ISPY - Free Report) and Nasdaq-100 High Income ETF (IQQQ - Free Report) invest in daily covered-call options with an aim to improve the trade-off between income and total return.
Tune in to the podcast to learn more.
Make sure to be on the lookout for the next edition of the ETF Spotlight and remember to subscribe! If you have any comments or questions, please email podcast@zacks.com.
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Why Dividend ETFs Deserve a Place in Your Portfolio
In this episode of ETF Spotlight, I speak with Kieran Kirwan, Director, Investment Strategy at ProShares about dividend growth and high-income strategies.
Dividend-paying stocks have been out of favor lately. Most investors have piled into growth stocks, particularly mega-cap tech stocks, while dividend payers are traditionally more mature companies in old economy sectors.
Further, with rising interest rates, money market funds and short-term bonds have become more attractive for income-seeking investors.
There are two popular approaches to dividend investing: dividend growth stocks and high dividend stocks. Dividend growers are usually high-quality companies with solid balance sheets and stable cash flows.
Apple (AAPL - Free Report) , Microsoft (MSFT - Free Report) and NVIDIA (NVDA - Free Report) have been paying a dividend for many years, but their yields are rather small. Alphabet (GOOGL - Free Report) and Meta Platforms (META - Free Report) recently announced their first-ever dividends.
The ProShares S&P 500 Dividend Aristocrats ETF (NOBL - Free Report) holds high-quality companies that have grown their dividend for at least 25 consecutive years. The ProShares S&P Technology Dividend Aristocrats ETF (TDV - Free Report) holds technology companies that have consistently raised their dividends for at least seven years.
The Vanguard Dividend Appreciation ETF (VIG - Free Report) and the iShares Core Dividend Growth ETF (DGRO - Free Report) also hold high-quality companies with a history of consistent dividend growth.
Covered-call ETFs that use options strategies to generate exceptionally high yields have been immensely popular over the past couple of years. In addition to high yields, these strategies generally reduce portfolio volatility.
Investors should, however, remember that these strategies work best in sideways markets but underperform in strong bull markets. They do provide some protection when stocks fall.
The ProShares S&P 500 High Income ETF (ISPY - Free Report) and Nasdaq-100 High Income ETF (IQQQ - Free Report) invest in daily covered-call options with an aim to improve the trade-off between income and total return.
Tune in to the podcast to learn more.
Make sure to be on the lookout for the next edition of the ETF Spotlight and remember to subscribe! If you have any comments or questions, please email podcast@zacks.com.