- These best performing ETFs so far this year could see further traction as investors return to the markets.
- First Trust Morningstar Dividend Leaders Index Fund (FDL): This ETF focuses on dividend growth consistency when choosing stocks.
- WisdomTree U.S. High Dividend Fund (DHS): Since 2006, DHS invests in high-quality dividend-paying names on Wall Street.
- Invesco S&P 500 Equal Weight Energy ETF (RYE): The energy sector has been on a tear in 2022, providing tailwinds for RYE.
Investors are scrambling to find the best performing ETFs (exchange-traded funds) in whgat has proven so far to be a tough year. Many stocks have given up a significant portion of their pandemic gains.
Wall Street has seen the tech-driven Nasdaq 100 index decline almost 24% year to date. Meanwhile, the benchmark S&P 500 is currently down around 13% during the same period.
However, not all assets and sectors suffered the same fate. The energy sector and commodities generated double-digit returns boosted by solid tailwinds from rising prices.
Therefore, it’s not surprising that energy ETFs dominated the list of best-performing ETFs during the first five months. Moreover, defensive ETFs that hold stocks with high dividend payouts, such as utilities, real estate, healthcare, and consumer staples, have also attracted significant net inflows this year.
Today’s article introduces three of the best performing ETFs that have done well since January and could continue to do so in June.
|FDL||First Trust Morningstar Dividend Leaders Index Fund||$39.18|
|DHS||WisdomTree U.S. High Dividend Fund||$90.83|
|RYE||Invesco S&P 500 Equal Weight Energy ETF||$77.73|
First Trust Morningstar Dividend Leaders Index Fund (FDL)
52 Week Range: $32.31 – $39.24
Dividend Yield: 3.54%
Expense Ratio: 0.45%
First Trust Morningstar Dividend Leaders Index Fund (NYSE:FDL) provides exposure to large-cap firms that have shown dividend consistency as well as dividend sustainability in past. Businesses within this segment are often considered to be among the safest firms on Wall Street.
FDL, which tracks the Morningstar Dividend Leaders Index, has 98 holdings. The fund started trading in March 2006.
In terms of allocations, health technology leads with 22.02%, followed by consumer non-durables at 16.49%, communications at 14.55% and utilities at 13.78%.
The top 10 holdings account for around 58% of its $2.8 billion in net assets. Among them are AT&T (NYSE:T), Abbvie (NYSE:ABBV), Chevron (NYSE:CVX), Verizon Communications (NYSE:VZ), and Pfizer (NYSE:PFE).
FDL has appreciated more than 9% year to date and currently is trading near its all-time high. The fund has an attractive price-to-earnings (P/E) ratio of 14.53 and a price-to-book (P/B) ratio of 2.33.
WisdomTree U.S. High Dividend Fund (DHS)
52-Week Range: $76.44 – $91.90
Dividend Yield: 3.05%
Expense Ratio: 0.38% per year
WisdomTree U.S. High Dividend Fund (NYSEARCA:DHS) offers the chance to invest in high-dividend-yielding companies in the U.S. equity market. The fund was launched in June 2006.
DHS, which tracks the WisdomTree U.S. High Dividend Index, has 754 holdings. Its subsector allocation is well-balanced. Energy leads the fund at 19.83%, followed by health care at 19.19%, consumer staples at 17.89%, financials at 13.29%, and utilities at 12.61%.
The top 10 stocks in the portfolio account for 46% of its net assets of $1.13 billion. Exxon Mobil (NYSE:XOM), Chevron, Philip Morris International (NYSE:PM), Pfizer, and Coca-Cola (NYSE:KO) are among the most prominent holdings.
DHS has returned 9.5% year to date and almost 15% over the past 12 months. It currently trades just below its all-time high. The fund offers a good investment route for high dividend stocks with trailing P/E and P/B ratios of 15.93 and 2.70, respectively.
Invesco S&P 500 Equal Weight Energy ETF (RYE)
52-Week Range: $36.64 – $74.75
Dividend Yield: 1.82%
Expense Ratio: 0.40% per year
RYE, which tracks the S&P 500 Equal Weight Energy Plus Index, has 24 holdings. In terms of sectoral allocations, it is heavily tilted toward oil, gas and consumable fuels at 87.71%, followed by energy equipment and services at 12.19%.
The top 10 stocks in the portfolio account for nearly 50% of its net assets of $667 million. Among the top stocks are energy giants Valero Energy (NYSE:VLO); Marathon Petroleum (NYSE:MPC); Hess (NYSE:HES); Coterra Energy (NYSE:CTRA) and Devon Energy (NYSE:DVN).
Since the start of the year, RYE has soared more than 61% and is trading near its 52-week highs at the time of writing. Nevertheless, the fund still offers solid value to invest in the energy sector, with forward P/E and P/B ratios of 16.78 and 2.54, respectively.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.