So you say you love dividend stocks and know in your heard that buying stocks that consistently raise their dividends will be crucial to a well performing portfolio. However, like a lot of people you neither have the time nor the inclination to research, keep track of, and purchase individual securities. The good thing is that there are a lot of options available in the market for you to do some dividend investing without buying individual companies.
The folks over at Seeking Alpha have put together a great list of ETFs and index funds that allow an investor to invest in the companies that make up the Mergent Dividend Achievers list. As a reminder, Mergent Dividend Achievers are stocks that have consistently raised dividends for a number of consecutive years. These are the types of stocks that I love as the dividends continue to grow and I reinvest quarter after quarter into more shares, compounding the effects of these growing dividend payments.
The following list was presented over at Seeking Alpha as places to put your money that follow the Mergent Dividend Achiever concept:
Blackrock Closed-End Funds
-Dividend Achievers (BDV)-Uses broad based list.
-Strategic Dividend Achievers (BDT)- Small and mid-caps.
-Enhanced Dividend Achievers (BDJ)- Like BDV but also uses option writing.
-Dividend Achievers (PFM): Broad Based, modified market cap weighted
-High Growth Dividend Achievers (PHJ): Filtered version using the 100 stocks with the highest annual dividend growth rate for the last 10 years.
-High Yield Equity (PEY)- Filtered version using 50 highest yielding stocks excluding REITs and Limited Partnerships. Yield weighted (instead of market cap).
-International (PID)- Foreign domiciled corporations with US listings. The bar is set lower for these stocks- only five years of annual dividend increases are required.
There are options available on each of the four Powershare ETFâ€™s.
-Dividend Appreciation Index Fund [VDAIX]
-Dividend Appreciation ETF (VIG)
These two funds are modeled off a filtered index called Dividend Achievers Select that requires a company to be incorporated in the US or its territories and trade on NYSE, NASDAQ or AMEX. There are also some additional liquidity requirements.
-CDN Dividend and Income Achiever [CDZ]: Based of Canadian dividend achievers. Trades in Canada on Toronto Exchange.
Some good options for more passive investors. Even if you like to purchase individual securities, I recommend that you check out these funds and take a look at their top holdings. It is interesting to see each funds strategy and who they have decided to concentrate their money.