Top ETFs of the Week: Growth, Value, and Opportunity
AInvestWednesday, Jul 17, 2024 12:31 pm ET
2min read
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As we approach the midpoint of 2024, the ETF market continues to offer diverse opportunities for investors. This week, we highlight three ETFs that have caught our attention due to their unique positioning, performance, and potential in the current market environment.

  • 1. WisdomTree US Quality Dividend Growth Fund (DGRW)

  • DGRW stands out as a compelling choice for investors seeking a balance between dividend income and capital appreciation. Unlike many dividend-focused ETFs, DGRW has a significant exposure to the technology sector, accounting for over 28% of its portfolio. This unique composition allows it to capture upside potential during market rallies while still providing a steady income stream.

    Key highlights:

  • Total return of over 9% since March, closely matching the S&P 500

  • Outperformed alternatives like VTI, SCHD, and VYM over a 10-year period

  • Low expense ratio of 0.28%

  • Monthly distributions with a current yield of 1.5%

  • While the starting yield may seem low, DGRW's growth-oriented approach makes it an excellent complement to a diversified portfolio of dividend-paying stocks. It's particularly well-suited for investors with a long-term horizon who can benefit from both dividend growth and capital appreciation.

  • 2. BlackRock Enhanced Equity Dividend Fund (BDJ)

  • BDJ, a closed-end fund, is currently trading at an attractive double-digit discount to its net asset value (NAV). This presents an interesting opportunity for value-oriented investors looking to capitalize on potential discount narrowing.

    Key points:

  • Current discount: -10.51%

  • Distribution yield: 8.25%

  • Expense ratio: 0.86%

  • No leverage used

  • BDJ focuses on dividend-paying stocks with potential for capital appreciation. Its value-oriented tilt provides diversification benefits in a market that has been dominated by growth stocks. The fund's discount management program, including potential tender offers, adds an extra layer of appeal for investors.

  • 3. Vanguard Russell 1000 Growth Index Fund ETF Shares (VONG)

  • As large-cap growth reasserts its dominance in Q2 2024, VONG emerges as a top contender for investors looking to capture this momentum. Despite concerns about valuation, the technical picture and potential for continued earnings growth among large-cap tech stocks make VONG an attractive option.

    Notable features:

  • Very low expense ratio of 0.08%

  • High long-term EPS growth rate of 14.7%

  • Favorable seasonal trends through July

  • While VONG's P/E ratio of 27.0x is considerably higher than the S&P 500, its focus on secular growth themes, particularly in the Information Technology sector, positions it well to benefit from ongoing trends like AI adoption.

    In conclusion, these three ETFs offer a range of strategies for different investor profiles. DGRW provides a growth-oriented approach to dividend investing, BDJ offers value through its significant discount to NAV, and VONG capitalizes on the continued strength of large-cap growth stocks. As always, investors should consider their individual risk tolerance and investment goals when evaluating these options.

Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.