In this article, we discuss 10 dividend ETFs that Redditors are buying in August. You can skip our detailed analysis of dividend ETFs and their performance this year, and go directly to check out why Redditors are Buying These 5 Dividend ETFs in August.
Given the turbulent start to 2022 that the major U.S stock indexes have endured, both retail and institutional investors have been rotating away from growth names and investing in dividend-focused exchange-traded funds (ETFs) instead. Dividend ETFs are considered safe, as they hold well-established companies with strong track records of dividend growth.
Rising inflation and recession risks this year have contributed to investors’ concerns about the economic landscape. According to Matt Bartolini, a Managing Director at State Street, investors are looking for yield protection in a declining market and are likely to prefer dividend strategies for the rest of the year. He further mentioned that dividend ETFs are attracting the bulk of the market’s attention this year, as they have seen over $25 billion of inflows, which makes up 92% of all smart beta-related ETF inflows.
The ProShares S&P Dividend Aristocrat ETF is notable in this regard, as it experienced positive inflows this year, according to a report by Lipper Fund Flows. The fund invests in high-quality companies that have been raising their dividends for over 25 years like The Procter & Gamble Company (NYSE:PG), Johnson & Johnson (NYSE:JNJ), and AbbVie Inc. (NYSE:ABBV). Considering the popularity of dividend stocks, we will discuss 10 dividend ETFs that Redditors are buying in August.
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Our Methodology:
We carefully studied different Reddit forums to compile a list of the most commonly purchased dividend ETFs among the community. These ETFs provide full exposure to high-quality dividend stocks. We also added some of these ETFs’ top holdings to provide a thorough analysis of these funds.
Redditors are Buying These 10 Dividend ETFs in August
10. Vanguard Dividend Appreciation Index Fund (NYSE:VIG)
The Vanguard Dividend Appreciation Index Fund (NYSE:VIG) tracks the performance of large-cap equities that hold strong records of growing their dividends. The fund is passively-managed and follows a full replication approach. As of August, the fund’s total assets amount to over $71.3 billion and it has an expense ratio of 0.06%. It was founded in 2006 and has delivered a 211.2% return to shareholders since then, while its 5-year returns came in at 67.9%.
JPMorgan Chase & Co. (NYSE:JPM) is one of the most prominent holdings of the Vanguard Dividend Appreciation Index Fund (NYSE:VIG), representing 2.89% of its portfolio. The company holds a 12-year track record of consistent dividend growth. It currently pays a quarterly dividend of $1 per share, with a yield of 3.38%, as of August 11. JPMorgan Chase & Co. (NYSE:JPM)’s dividend payments shot up to $3 billion in Q2 from $1.7 billion in the preceding quarter.
In addition to The Procter & Gamble Company (NYSE:PG), Johnson & Johnson (NYSE:JNJ), and AbbVie Inc. (NYSE:ABBV), JPMorgan Chase & Co. (NYSE:JPM) is also one of the most prominent dividend stocks for investors to consider.
At the end of Q1 2022, 110 of the hedge funds tracked by Insider Monkey’s database owned stakes in JPMorgan Chase & Co. (NYSE:JPM), up from 107 in the previous quarter. The collective value of those stakes was over $5 billion. Ken Fisher’s Fisher Asset Management was the company’s leading stakeholder in Q1.
Carillon Tower Advisers mentioned JPMorgan Chase & Co. (NYSE:JPM) in its Q1 2022 investor letter. Here is what the firm had to say:
“More cyclical sectors, including technology and consumer discretionary, were among the weakest, likely due to rising interest rates and inflation. It was encouraging to see the quarter finish on a strong note with the S&P 500 only about 5% away from its all-time highs. Shares of JPMorgan Chase (NYSE:JPM) detracted from performance due to the company’s increased expense guidance, announced in January.”
9. Vanguard High Dividend Yield Index Fund (NYSE:VYM)
The Vanguard High Dividend Yield Index Fund (NYSE:VYM) focuses on dividend stocks that offer high-dividend yields. The total assets of the fund stood at over $55.6 billion and the median market cap of its holdings is $130 billion. The fund has 443 stocks in its portfolio, belonging to the healthcare, financial, energy, and industrial sectors. In the past five years, the fund delivered a return of 36.7%, as of the market close of August 10.
Among its holdings, Exxon Mobil Corporation (NYSE:XOM) takes one of the most prominent positions, accounting for 2.69% of its portfolio. The company offers a quarterly dividend of $0.88 per share and has a dividend yield of 3.85%, as of August 11. It has raised its dividend 38 years in a row and paid $3.7 billion in dividends to shareholders in Q2 2022.
Exxon Mobil Corporation (NYSE:XOM) was a part of 83 hedge funds’ portfolios in Q1 2022, up from 71 in the previous quarter. The stakes owned by those hedge funds had a total value of $8.5 billion, compared to just over $5.3 billion in the preceding quarter.
Saturna Capital mentioned Exxon Mobil Corporation (NYSE:XOM) in its Q4 2021 investor letter. Here is what the firm had to say:
“Few companies maintain their position at the top for more than a decade or two. One that did was Exxon, which appeared decennially from 1980 through 2010. In 2019 it was ranked 10th, but as of writing has dropped to 39th place.”
8. ProShares S&P 500 Dividend Aristocrats ETF (BATS:NOBL)
The ProShares S&P 500 Dividend Aristocrats ETF (BATS:NOBL) was founded in 2013 and has returned 125% to shareholders since then, while its 5-year return stood at 59.9%, as of the close of August 10. The fund tracks the performance of high-quality dividend stocks that have strong dividend histories, raising their dividends for 25 years or more.
The ProShares S&P 500 Dividend Aristocrats ETF (BATS:NOBL) has a total of 64 companies in its portfolio, with its total assets amounting to over $9.5 billion. Colgate-Palmolive Company (NYSE:CL) is one of the most prominent holdings of the fund, making up 1.54% of its portfolio. The company has one of the longest dividend growth streaks, hiking its dividends for 60 years. It pays a quarterly dividend of $0.47 per share, with a dividend yield of 2.34%, as recorded on August 11.
With over 11 million shares, First Eagle Investment Management was the largest stakeholder of Colgate-Palmolive Company (NYSE:CL) in Q1 2022. Overall, 50 hedge funds tracked by Insider Monkey were bullish on the company in Q1, up from 48 in the previous quarter. The stakes owned by those hedge funds were valued at roughly $2.6 billion.
7. Amplify CWP Enhanced Dividend Income ETF (NYSE:DIVO)
The Amplify CWP Enhanced Dividend Income ETF (NYSE:DIVO) is an actively-managed, exchange-traded fund that tracks the performance of large-cap dividend stocks that have a solid history of dividend growth. The total assets of the fund are valued at over $1.68 billion and it has an expense ratio of 0.55%. Since its inception in 2016, the fund has delivered a 42.6% return to shareholders, while in the past five years its returns came in at 33.5%.
The Home Depot, Inc. (NYSE:HD) is one of the major holdings of the Amplify CWP Enhanced Dividend Income ETF (NYSE:DIVO), accounting for 5.23% of the fund’s portfolio. The company was a popular stock among elite funds in Q1 2022, as 75 hedge funds tracked by Insider Monkey’s database owned stakes in the company, up from 68 a quarter earlier. Those stakes had a collective value of nearly $5.6 billion.
In Q1 2022, The Home Depot, Inc. (NYSE:HD) distributed $2 billion worth of dividends to its shareholders. The company’s current quarterly payout stands at $1.90 per share, with a dividend yield of 2.44%, as of August 11. It maintains a 14-year track record of consistent dividend growth and has a 10-year dividend CAGR of 17.9%.
Diamond Hill Capital mentioned The Home Depot, Inc. (NYSE:HD) in its Q1 2022 investor letter. Here is what the firm had to say:
“Home Depot shares underperformed as continued solid fundamental results were outweighed by concerns about the impact rising mortgage rates may have on the housing market and general inflationary pressures potentially leading to a consumer spending slowdown. We view the long-term prospects and multi-year fundamental outlook as unchanged.”
6. SPDR Portfolio S&P 500 High Dividend ETF (NYSE:SPYD)
The SPDR Portfolio S&P 500 High Dividend ETF (NYSE:SPYD) is one of the most famous ETFs among Redditors despite modest gains, as the fund has gained 3.57% in the past year and 20.22% over the past five. The fund provides exposure to high dividend-yielding companies within the S&P 500 Index. It has 80 dividend stocks in its portfolio with an average market cap of $48.9 million.
The SPDR Portfolio S&P 500 High Dividend ETF (NYSE:SPYD) has total assets worth over $8.1 billion and its gross expense ratio stands at 0.07%. 3M Company (NYSE:MMM) is one of the most prominent holdings of the fund, representing 1.34% of its portfolio. In Q2 2022, the company paid out $800 million in dividends, which accounted for 83% of its net income. 3M Company (NYSE:MMM) has been raising its dividends consistently for the past 64 years. It pays a quarterly dividend of $1.49 per share and has a dividend yield of 3.99%, as of August 11.
The number of hedge funds tracked by Insider Monkey that are long 3M Company (NYSE:MMM) stood at 51 in Q1 2022, growing from 41 in the previous quarter. Their collective stakes were valued at over $1.53 billion on March 31. Fisher Asset Management owned over 6 million shares in the manufacturing company, becoming its leading stakeholder in Q1.
Hedge funds have also presented a bullish stance on other dividend stocks like The Procter & Gamble Company (NYSE:PG), Johnson & Johnson (NYSE:JNJ), and AbbVie Inc. (NYSE:ABBV), some of which we’ll delve into in the second part of this article.
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Disclosure. None. Redditors are Buying These 10 Dividend ETFs in August is originally published on Insider Monkey.