Four dividend ETFs—four strategies

Article Excerpt

Rising interest rates mean dividend-paying stocks and fixed-income instruments must increasingly compete for investor interest. However, sustainable dividends still offer an attractive and growing income stream for investors (see supplement on page 50). Here are four ETFs that provide exposure to Canadian, U.S. and international dividend payers. VANGUARD DIVIDEND APPRECIATION ETF $100 (New York symbol VIG; TSINetwork ETF Rating: Aggressive; Market cap: $26.8 billion) invests in U.S. companies with a track record of increasing their dividends over time. There is also a Canadian version (Toronto symbol VGH), which hedges against foreign currency exposure. The ETF selects companies that have increased their dividends each year for at least 10 consecutive years. It then makes its final selection by evaluating each stock against a set of criteria. The aim is to identify those stocks most in danger of cutting their dividends. The fund’s largest industry segmentss are Industrials (34%), Consumer Services (15%), Health Care (13%), Consumer Goods (13%) and Technology (10%). The ETF holds a diversified portfolio of 184…

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