HDV: Another Dividend ETF Arrives

Last Thursay, BlackRock, Inc. (BLK) launched the iShares High Dividend Equity Fund (HDV). The new ETF provides exposure to high quality income-producing U.S. securities based on the Morningstar Dividend Yield Focus Index. The underlying index seeks to identify companies providing relatively high dividend yields on a consistent basis. Morningstar’s proprietary methodology screens for superior company quality and financial health. The process uses Morningstar’s Economic Moat rating system, which describes the sustainability of a company’s future economic profits. It also uses the Morningstar Distance to Default measure, which quantifies the likelihood that a company may encounter financial distress. Unlike many other dividend ETFs that have a high exposure to Financials, Morningstar’s process currently produces just a 2.5% weighting to that sector. Overall sector breakdown comes in with Health Care at 25.4%, Consumer Goods 21.4%, Telecommunications 17.4%, Utilities 13.0%, Energy 10.8%, Technology 4.8%, Industrials 3.2%, Financials 2.5%, Consumer Services 0.7%, and Materials... Read more

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