ETFs for Dividend SeekersKaryn Mccormack
Starting Sept. 15, investors will be able to invest in three new baskets of dividend-paying companies. The three new PowerShares “Dividend Achievers” Portfolios, which will trade on the AMEX, are exchange traded funds (ETF) based on the Mergent Dividend Achievers indexes. A "dividend achiever" is a company that has increased annual dividends for at least 10 consecutive years.
The PowerShares Dividend Achievers Portfolio (PFM) is based on an index that currently has 313 companies that have hiked their dividends on average for 22 years and by 12% annually for the last 10 years. The top five holdings of this ETF are Exxon Mobil (XOM), General Electric (GE), Citigroup (C), Wal-Mart (WMT), and Pfizer (PFE), according to PowerShares.
The PowerShares High Growth Dividend Achievers Portfolio (PHJ) is based on an index of 100 dividend achievers with the highest 10-year annual dividend growth rate. This group has raised dividends by an average of 20.2% annually for the last decade and have beaten the S&P 500 index for the last three, five, and 10-years (through June 30). The top five holdings are Citigroup (C), Wal-Mart (WMT), Pfizer (PFE), Johnson & Johnson (JNJ), and American International Group (AIG).
The PowerShares International Dividend Achievers Portfolio (PID) differs from the other two in that it evaluates dividend growth of international companies (that trade in ADRs in the U.S.) over a 5-year period. The ETF's top five holdings are Eni (E), ABN Amro Holding (ABN), Aracruz Celulose (ARA), Barclays (BCS), and HSBC Holdings (HSBC).
In addition to those three new ETFs, PowerShares has been offering the PowerShares High Yield Equity Dividend Achievers Portfolio (PEY), which has the 50 "dividend achievers" with the highest dividend yield.