Although some European worries are impacting stocks, the
S&P 500 continues to surge higher. The key benchmark is now
within striking distance of its all-time high levels, with many
expecting a surge beyond those marks.
Still, with recent worries in some key markets, some are also
expecting a breather in the short-term. This could be especially
true if domestic data turns south or if the current relationship
between the dollar and the market falls apart (see
Italy ETF Plunges on Election Chaos
Furthermore, the U.S. economy is also faced with headwinds in
the near future with the Federal Reserve divided on the monetary
easing front. Of course the better-than-expected earnings season
has been a positive for the stock market sentiment which was a
major catalyst behind the market surge.
Also, volatility has been fairly subdued in the recent months
with the market sentiments on a high. However, with the recent
developments in the domestic as well as global economic space,
anxiety seems to be returning in the market. Also, finding
avenues for current income has been a pain for a long time for
Homebuilder ETFs After Housing Data
With this backdrop, let us have a look at an exchange traded
fund (ETF) which combines low volatility and dividend payouts in
one single product, the
WisdomTree Large Cap Dividend ETF (
This fund could be an interesting choice for those seeking a
great combo of the two above features, while also utilizing the
Zacks ETF Rank.
About the Zacks ETF Rank
The Zacks ETF Rank provides a recommendation for the ETF in
the context of our outlook of the underlying industry, sector,
style box, or asset class. Our proprietary methodology also takes
into account the risk preferences of investors as well.
The aim of our models is to select the best
within each risk category. We assign each ETF one of five ranks
within each risk bucket. Thus, Zacks Rank reflects the expected
return of an ETF relative to other ETFs with similar level of
risk (see more in the
Zacks ETF Center
Using this strategy, we have found a Ranked 1 or 'Strong Buy'
large cap ETF which we have highlighted in greater detail
DLN in Focus
Launched in June of 2006, DLN tracks the WisdomTree Large Cap
Dividend Index, an index which measures the performance of large
cap companies which are good dividend payers. The index is
dividend weighted and its portfolio is comprised of 300 stocks,
while it is also a subset of the WisdomTree Dividend Index.
The ETF is hheavily concentrated in Consumer Staples (15.93%),
Information Technology (14%), Financials (12.83%), Healthcare
(11.55%) and Energy (11%). From an individual holdings
perspective, AT&T Inc, Exxon Mobil Corp, Apple Inc, General
Electric Co and Microsoft Corp form the top 5 holdings which
together account for 15.5% of its portfolio.
DLN had a total return of 12.58% for the fiscal year 2012. It
also pays out a yield of 2.50%. One of the major disadvantages
for the ETF is that compared to other broad market products, it
charges a relatively steep expense ratio of 28 basis points. Of
course the decent dividend yield is a plus, especially when
compared to dividend products like
Inside the Top Zacks Ranked Retail ETF
Furthermore, the ETF also goes a long way in mitigating the
exposure to volatility as it has only exhibited a volatility of
15.68%, measured by the annualized standard deviation. In the
same time, the S&P 500 has had a volatility of around 18.5%.
DLN has an asset base of $1.38 billion.
DLN has a Zacks ETF Rank of 1 or
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WISDMTR-LC DIV (DLN): ETF Research Reports
SPDR-SP DIV ETF (SDY): ETF Research Reports
VANGD-DIV APPRC (VIG): ETF Research Reports
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