Market Overview

Get 5 Dividend ETFs In 1 With This New ETF


Investors love dividends and dividend exchange traded funds. Over $100 billion has flowed into such ETFs over the past five years. ETF issuers have also been embracing the ETF of ETFs structure, or those ETFs that are comprised of other ETFs.

Those two themes meet in the newly minted Amplify YieldShares Prime 5 Dividend ETF (BATS: PFV). PFV hails from the same issuer that launched the Amplify Online Retail ETF (NASDAQ: IBUY), one of this year's best-performing consumer discretionary ETFs.

The quintet of dividend ETFs comprising PFV's lineup is curated based on factors such as low fees, low volatility and income-generating potential. PFV's roster is comprised of well-known dividend and value ETFs, such as the iShares Core High Dividend ETF (NYSE: HDV), Vanguard High Dividend Yield ETF (NYSE: VYM), Schwab US Dividend Equity ETF (NYSE: SCHD), Schwab U.S. Large-Cap Value ETF (NYSE: SCHV) and the WisdomTree High Dividend Fund (NYSE: DHS).

“Potential investors should be aware of their company exposure when investing in these types of fund-of-fund strategies. For instance, investors would be overweight large companies like Microsoft Corporation (NASDAQ: MSFT), AT&T (NYSE: T) and Exxon Mobil Corp. (NYSE: XOM) as the five underlying ETFs all count these companies among their top holdings,” according to ETF Trends.

DHS has been remarkably productive and rewarding for investors over the past decade. The ETF tracks the WisdomTree High Dividend Index, which is one of “11 of WisdomTree’s 12 dividend-weighted Indexes beat their comparable broad based cap-weighted index over the past 10 years in the U.S. and in the developed world,” according to WisdomTree.

A significant driver of DHS's success is that the ETF, like other WisdomTree dividend ETFs, breaks from the norms of the dividend ETF universe. Those norms being either weighting by yield or focusing on backward-looking dividend increase streaks. Rather, DHS's underlying index “is dividend weighted annually to reflect the proportionate share of the aggregate cash dividends each component company is projected to pay in the coming year, based on the most recently declared dividend per share,” according to WisdomTree.

SCHD is the least expensive ETF in PFV's lineup with an annual fee of just 0.07 percent. DHS is the only ETF on PFV's roster that pays a monthly dividend. The new amplify ETF charges 0.49 percent per year, or $49 on a $10,000 investment.


Related Articles (DHS + VYM)

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Posted-In: Long Ideas News Dividends Specialty ETFs New ETFs Trading Ideas ETFs

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