This Dividend-Focused ETF Is Not a Good Dividend Investment
If you are a dividend investor, one of the easiest ways to cull your list of possible investments is to focus on companies with long histories of annual dividend increases. This is exactly the group of stocks you'll find in Invesco Dividend Achievers ETF (NASDAQ: PFM). But at the end of the day, this exchange-traded fund (ETF) isn't really a dividend investment. Here's why.
Invesco Dividend Achievers ETF is a passively managed exchange-traded fund, meaning that it is designed to blindly follow an index. The index in question here is the "Nasdaq US Broad Dividend Achievers Index, which is designed to identify a diversified group of dividend-paying companies." To get on that list, a company needs to have increased its dividend annually for at least 10 consecutive years. The index is updated annually, and the market-cap-weighted ETF is rebalanced four times a year, though no single stock will be allowed to account for more than 4% of the total portfolio.
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Source Fool.com
