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With Dividend Growth Fashionable Again, Consider This ETF

BY | ETF Database
6:11 am ET 09/24/26 | 14 VIEWS
  • Related Symbols
  • DLN
Dividend investing, particularly when it emphasizes reliable payout growth, is an all-weather strategy, but in recent years, it’s arguably taken a backseat to share repurchases and investors’ affinity for mega-cap growth stocks, many of which aren’t dividend payers.Styles and tastes change over shorter holding periods, but the right dividend ETFs, including the WisdomTree U.S. LargeCap Dividend Fund (DLN A-) are built for the long haul. But for those with “What have you done for me lately?” perspectives, the $6.25 billion DLN deserves some credit. The ETF is nearly keeping pace with the S&P 500 this year, while subjecting investors to significantly less annualized volatility, indicating it’s been the better risk-adjusted bet. Important to long-term investors are two points. First, DLN is home to scores of stocks with established track records of payout growth and plenty that are newer entrants to the dividend growth fray. Second, many of the ETF’s holdings easily fit the bill as quality companies. “Dividend growth has long been viewed as a symbol of corporate ‘quality,’” noted Morningstar’s Dan Lefkovitz. “Only profitable companies secure in their financial positions consistently increase cash returned to shareholders. While share buybacks can be opportunistic, dividends are a commitment. The market typically punishes dividend cutters.”Defense? Offense? DLN Has BothAs Lefkovitz points out, many dividend growth indexes are heavily allocated to value stocks, with some featuring hefty exposure to defensive sectors. That’s the result of many payout growth leaders hailing from defensive and value sectors. “Meanwhile, the generally lower-priced financial services, healthcare, industrials, and consumer defensive sectors are overrepresented among dividend growers,” observed the Morningstar analyst. Indeed, DLN devotes roughly 40% of its portfolio to financial services, healthcare and consumer staples equities. However, that doesn’t imply that this is a boring dividend ETF. DLN’s largest sector exposure is technology at 21.7%, confirming that the fund positions investors to capitalize on a relatively new source of dividend growth. Said another way, DLN, more so than many dividend ETFs, is responsive to new trends in the dividend space. For example, Nvidia (NVDA), which earlier this year raised its payout by 2,400%, is the ETF’s second-largest holding. While Nvidia isn’t yet a dividend growth stock in the classical sense, it has the capacity to get there. “In absolute terms, Nvidia’s dividend is huge. Something like $25 billion per year will be returned to shareholders. That sum will make Nvidia one of the largest dividend payers in the US stock market,” concluded Lefkovitz. For more news, information, and analysis, visit the Modern Alpha Content Hub.Disclosures_This article was prepared as part of WisdomTree’s general paid sponsorship of VettaFi | ETF Trends. This specific content within and any opinions expressed therein belong solely to VettaFi and do not reflect the opinion or analysis of WisdomTree, its employees, or its affiliates. Content published on VettaFi | ETF Trends is provided for educational purposes only and should not be considered investment or tax advice. For investment or tax advice, please consult a financial professional. _ WisdomTree is an independent company, unaffiliated with VettaFi | ETF Trends. WisdomTree has not been involved with the preparation of the content supplied by VettaFi | ETF Trends. It does not guarantee, or assume any responsibility for its content.

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