The quality factor is a favorite among advisors and investors, but it has been a disappointment this year, lagging its momentum rival. Quality's laggard status has also plagued some dividend exchange-traded funds, a scenario that has put some income investors in a bind.
Adding to the conundrum is the fact that many of the dividend ETFs rooted in quality also hold ample amounts of high-yielding stocks in interest rate-sensitive sectors. High-yield dividend ETFs, particularly those with a direct or incidental emphasis on the quality factor, have proven vulnerable to speculation that the Federal Reserve is set to finally raise interest rates. This is due to the trend that those funds usually feature large allocations to rate-sensitive sectors such as consumer staples, real estate and utilities.
Strategizing
One strategy income investors can implement with dividend ETFs is to eschew yield ...
/www.benzinga.com/trading-ideas/long-ideas/15/11/5979097/quality-conundrum-for-dividend-etfs alt=Quality Conundrum For Dividend ETFs>Full story available on Benzinga.com
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