ETF That Tracks Quality Dividend Stocks

In the ongoing hunt for yields, exchange traded fund investors have delved deep into the markets, fishing out the highest yielding, and often riskiest, funds. Investors, though, should not overlook the more stable ETFs that provide exposure to quality dividend-producing firms. For instance, Samuel Lee, ETF analyst at Morningstar, highlighted the Vanguard Dividend Appreciation ETF (NYSEArca: VIG) as a quality dividend ETF pick.

“VIG focuses on quality dividends, demanding that companies increase them for 10 consecutive years just to make the cut. It then imposes further tests for liquidity and financial strength,” Lee wrote. “The exact formula is secret but seems to weed out companies with high leverage and poor cash flow. The result is quality rather than high yield, so income-hungry investors might be surprised by a dividend yield that just matches the market.”

Source: ETF Trends

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