DGRW ETF: Dividend growth fund just crossed a key milestone
The WisdomTree U.S. Quality Dividend Growth Index (DGRW) ETF has done well this year as it jumped by about 7%. It has underperformed the S&P 500 and done much better than the extremely popular Schwab US Dividend Equity ETF (SCHD), which has tanked by over 6%.
Is DGRW a good fund to buy?Copy link to section
WisdomTree US Quality Dividend Growth Fund is a large ETF with over $8.7 billion in assets. The fund competes with other dividend-focused funds like the SPDR S&P Dividend ETF (SDY), iShares Core High Dividend ETF (HDV), and iShares Select Dividend ETF among others.
DGRW does not have a high dividend yield. Yielding at about 2%, the fund has a lower return than other similar players in the industry. Instead, the fund focuses on dividend growth. In the past five years, the fund has had a CAGR of 12.31%.
DGRW ETF tracks almost 300 companies, most of which have a market cap of over $10 billion. As a result, all companies in the index are also part of the S&P 500 index. As such, historically, it has had a close correlation with the index.
Most of the companies in the index are in the software and services followed by food and beverage, pharmaceutical, technology hardware, semiconductors, and capital goods among others. Some of the top companies in the index are Microsoft, Apple, Johnson & Johnson, Broadcom, and Coca-Cola among others. In all, the top ten companies in the fund account for just 38.2% of DGRW.
So, is DGRW a good ETF to invest in? The WisdomTree U.S. Quality Dividend Growth Index is not a bad ETF. However, I believe that traditional funds like the SPDR S&P 500 index and Invesco QQQ are better alternatives to sleep well at night.
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DGRW ETF stock price forecastCopy link to section
The DGRW ETF has made a strong bullish trend in the past few months. And last week, the index moved above the important resistance point at $63.43, the highest point since December last year. It has failed to move above this level several times this year.
Further, the fund has jumped above the 50-day and 100-day exponential moving averages (EMA). The Awesome Oscillator has moved above the neutral point. Therefore, the outlook of the fund is bullish, with the next level to watch being at $70.