WisdomTree US Quality Dividend Growth Fund(Nasdaq: DGRW) is one of the several funds on the stock exchange (ETF) focused on dividend payment campaigns. This emphasis on dividends has become popular with investors who want to get passive income.
Look if this fund is the best choice if your main goal is to produce passive income;
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The WisdomTree US Quality Dividend Growth Foundation aims to follow a return on larger, high quality US companies with strong data on its income and dividends. Foundation follows WisdomTree US Quality Dividend Growth Indexwhich are screening the 300 best -paying companies based on a combination of growth and quality factors.
Foundation ETF weight companies, based on cash they pay in dividends each year compared to their The top limit of the market; This weight more emphasizes size Dividends of the company than the total size. Here’s a slide demonstration aimed at the top 10 of its holdings, taking into account the last excavation of it:
Image Source: Wisdom.
Like that slide, Tech Titan Microsoft Has the largest target fund – 8%. This is a lower percentage of Microsoft than if the fund uses the weight of the top market. Foundation weights by dividend to help emphasize the payments of the dividend. That’s why the oil giant Exxonmobil moved up to third place, despite this Nvidia;
Weight stocks according to the flow of dividends compared to the top of the market, the Foundation offers a higher dividend yield. The last worsening it reached 1.8%compared to 1.3% S&P 500; This is because it reduced the distribution on lower fertile dividend shares while increasing its impact on companies offering higher yields, such as 3.4%Exxon. By comparison, the Microsoft benefit was recently 0.7%and NVIDIA was 0.03%.
Wisdomtree US Quality Dividend Growth Fund emphasizes growth compared to dividend yields. This is not a bad strategy. Historically, dividend growth campaigns have provided a higher overall return than companies that do not increase their dividend, up to 10.2% of the annual since 1973 compared to 6.8% of the latter, according to Ned Davis Research and Hartford funds.
However, given the lower income, if your focus is on generating passive income, the fund may not be the best choice. Several dividends ETF offers higher yields including Vanguard High Dividend harvest ETF(Nysemkt: VYM) and Schwab US DIVIDEND EQUITY ETF (NYSEMKT: SCHD); The last payment of Vym provided an implicit dividend yield of about 2.6%and Schd was closer to 4%.
Vanguard High Dividend harvest ETF sequence FTSE high dividend vintage indexconsisting of companies whose dividend yield is higher than average except Reits; Currently, this has been reduced by more than 585 companies. This regularly removes companies that are no longer able to dividend.
Schwab US DIVIDEND EQUITY ETF is more selective. It follows Dow Jones US Dividend 100 Arrowwhich screens a high -level dividend shares in 100 highest quality companies based on their relative main financial force and dividend growth results in the last five years. It restores its shares over the year, replacing lower -quality dividend shares with the highest quality payers.
In addition to paying higher yields, these ETFs are lower ETF costs ratio: 0.06% of VYM and SCHD compared to 0.28% DGRW. Look at the perspective, each $ 10,000 investing in DRGW would cost about $ 28 annual fees compared to $ 6 for Vym or Schd. Those higher costs consume dividend revenue generated by the Foundation.
Wisdomtree US Quality Dividend Growth Fund is a Okay Foundation For those who want to include dividend shares in their portfolio. Companies that pay growing dividends usually usually provide a high overall return.
However, the fund has several disadvantages if the main goal is to get passive income. It has a lower return to a higher cost ratio than other dividend ETFs, so this is not the best dividend ETF to buy passive income.
Before buying WisdomTree shares in the US Quality Dividend Growth Fund, consider this:
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Matt Diallo occupies positions at the ETF of the US dividend shares in the US dividend. The Motley Fool holds positions and recommends Microsoft, Nvidia and Vanguard Whitehall Fund-Vanguard High Dividend ETF. The Motley Fool recommends Wisdomtree and recommends the following options: 2026. January 395 USD calls Microsoft and short in 2026. January $ 405 Microsoft calls. The Motley fool has a disclosure policy.
DGRW is popular with passive income dividends ETF. But is that best? initially released by The Motley Fool
