The Zacks Analyst Blog VYM, SDIV, DIV, VIG and NOBL
For Immediate Releases
Chicago, IL – August 26, 2024 – Zacks.com announces the list of stocks and ETFs featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Vanguard High Dividend Yield ETF VYM, Global X SuperDividend ETF SDIV, Global X SuperDividend U.S. ETF DIV, Vanguard Dividend Appreciation ETF VIG and ProShares S&P 500 Dividend Aristocrats ETF NOBL.
Here are highlights from Monday’s Analyst Blog:
Why You Should Buy Dividend ETFs Now
A global gauge of stocks hit a record high as traders bet big on the fact that the Federal Reserve is likely to deliver its first interest-rate cut in more than four years. The MSCI All Country World Index is hovering around its peak close from Jul 16, hinting at growing confidence in an imminent interest rate cut by the Federal Reserve.
Investors await Federal Reserve Chair Jerome Powell's speech at the Jackson Hole economic symposium, expecting further signals of a September rate cut following revised payroll data and dovish Fed minutes. However, caution needs to be exercised. While French services showed robust growth, Germany's composite PMI suggested an economic slowdown. In Britain, the private sector growth strengthened with easing price pressures.
The report for annual benchmark revisions from the Bureau of Labor Statistics out Wednesday showed there were 818,000 fewer people employed as of this March than had been previously reported. The team at Capital Economics pointed out that this indicates the average monthly job gains seen from March 2023 through March 2024 were closer to 174,000 rather than the 242,000 initially reported, as quoted on Yahoo Finance.
Although this data should not change the likelihood of the Fed cutting rates by 25 bps in September, volatility may be in the cards. Gerry Fowler, head of European equity strategy and global derivative strategy at UBS suggested an increase in volatility this year due to declining nominal GDP, interest rate cuts, and uncertainty in the jobs market.
Here’s why dividend ETFs should be considered now.
Focus on Dividends
Dividend-paying stocks provide a steady income stream and help mitigate potential losses during weaker market periods. These stocks offer the best of both worlds — safety in the form of payouts and stability in the form of mature companies that are less volatile to the large swings in stock prices.
Inside the Lucrativeness of High-Dividend ETFs
High-dividend ETFs can be a good investment during times of economic uncertainty, as they provide a steady source of income regardless of market conditions. These types of stocks and ETFs typically pay out a higher percentage of their profits as dividends than other stocks, which means that they can make up for the capital losses, if there are any.
Examples of such ETFs are Vanguard High Dividend Yield ETF (which charges 6 bps in fees and yields 2.86% annually), Global X SuperDividend ETF (which charges 58 bps in fees and yields 10.85% annually) and Global X SuperDividend U.S. ETF (which charges 45 bps in fees and yields 6.26% annually).
Dividend-Growth ETFs in Focus
High-quality dividend stocks with a history of consistent dividend payments and growth can offer both income and the potential for capital appreciation over the long term. Examples of such ETFs are Vanguard Dividend Appreciation ETF and ProShares S&P 500 Dividend Aristocrats ETF. The VIG ETF and NOBL ETF charge 6 bps and 35 bps in fees, respectively.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Vanguard Dividend Appreciation ETF (VIG): ETF Research Reports
ProShares S&P 500 Dividend Aristocrats ETF (NOBL): ETF Research Reports
Vanguard High Dividend Yield ETF (VYM): ETF Research Reports
Global X SuperDividend U.S. ETF (DIV): ETF Research Reports
Global X SuperDividend ETF (SDIV): ETF Research Reports