ETFs are extremely useful tools for investors, but often you have to dig deep to find the best ones. Often the more popular and liquid ETFs are suitable more for traders than for investors. Investing, as opposed to trading, requires a strategy that incorporates a fundamental outlook on the underlying assets that it holds. Many of the most popular ETFs just focus on broad indexes, which may perform well, but which are not designed with any fundamental metrics in mind.
Given this, there are several ETFs that are popping up in order to suit the needs of investors rather than traders, but because there are so many investment strategies out there we find that there are nearly as many ETFs catering to investors who wish to employ these strategies. As an investor it can be daunting. However if you search you can find a handful of ETFs that fit your investment philosophy, and they can become a cornerstone of your long term investment portfolio.
One such ETF is the SPDR S&P Global Dividend Portfolio (NYSEARCA:WDIV). This fund holds the world’s global Dividend Aristocrats. Dividend Aristocrats are companies that have not just paid dividends, but which have raised their dividends for twenty-five consecutive years. This consistency speaks to the quality of these companies’ managements, the strength of their businesses, and their devotion to long term shareholders.
What I like about WDIV is not just that it focuses on dividends. After all there are dozens of these sorts of funds. Furthermore there are other Aristocrat ETFs such as the Proshares S&P 500 Dividend Aristocrats ETF (NYSEARCA:NOBL). While this fund should perform well keep in mind that it is limited to the S&P 500. There are small-cap companies and foreign companies that also qualify as Aristocrats, and excluding them limits your portfolio.