The WisdomTree U.S. Quality Dividend Growth ETF (DGRW) made its debut on 05/22/2013, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.
The WisdomTree U.S. Quality Dividend Growth Fund ETF has a P/E ratio above 20 and a PEG not far from two, making it less attractive today. With a disciplined strategy and quality portfolio, there are reasons to like DGRW. The technicals appear sound heading into a bullish part of the calendar.
These funds invest in stocks that have proven track records for dividend growth.
In the value vs. growth debate, growth stocks significantly outperformed value stocks over the past decade, driven by the “Magnificent 7". The increasing dividend payments by large-cap growth companies blur the lines between growth and value strategies, as evidenced by DGRW keeping pace with the S&P 500 despite the dominance of these growth companies. An all-weather equity strategy like DGRW helps investors stay invested through both up and down markets, emphasizing the value of time in the market over trying to time it.
High interest rates have had the predictable effect of restraining the performances of dividend stocks and related ETFs. Over the past three years, some of the largest ETFs in the category deliver upside.
Launched on 05/22/2013, the WisdomTree U.S. Quality Dividend Growth ETF (DGRW) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.
The economic environment is changing, with falling consumer spending and anemic growth rates. Dividend investors are struggling for income despite record-high markets. WisdomTree U.S. Quality Dividend Growth Fund downgraded to Sell due to minimal payouts and economic slowdown signs.
For investors seeking momentum, WisdomTree U.S. Quality Dividend Growth Fund DGRW is probably on the radar. The fund just hit a 52-week high and is up 32.3% from its 52-week low of $61.21 per share.
DGRW is an index fund tracking the WisdomTree U.S. Quality Dividend Growth Index, a dividend growth index. The portfolio closely tracks the S&P 500, removing non-dividend paying companies. We explore DGRW's problems including inconsistent dividend growth and high expenses relative to peers.
WisdomTree US Quality Dividend Growth Fund (DGRW) is able to capture higher levels of price appreciation due to its holding make up. DGRW offers exposure to the tech sector while maintaining a priority focus on dividends. Although the starting yield of 1.5% is low, DGRW does offer some dividend growth over time.
I believe the DGRW ETF's simultaneous focus on growth and dividends makes it unappealing for investors due to its mixed investment strategy and higher expense ratio. Investors would benefit from selecting distinct ETFs like SCHD, VYM, VGT, or QQQM, which offer lower expense ratios and can be better tailored to specific investment objectives. My article does not aim to recommend entering DGRW at current prices. Instead, it argues that this ETF lacks a clear use case.
With the high attention investors are devoting to mega-cap growth stocks, it's not surprising that dividends are taking a backseat. That shouldn't be the case because dividend payers perform well over the long-term and data confirm payouts increased in the second quarter – both positive signs for exchange traded funds such as the WisdomTree U.S.