During these times of historically low interest rates, investors around the world seek safety, growth and yield. Based on the charts of popular dividend exchange-traded funds (ETFs), which we discuss below, the recent spike in volatility and subsequent dip in prices has created an interesting buying opportunity for those who use technical analysis as part of their trading strategy. (For a quick refresher, check out: 3 Ways to Add Dividends to Your Portfolio.)
First Trust Dow Jones Global Select Dividend Index Fund
Fundamentally, as the name suggests, the First Trust Dow Jones Global Select Dividend Index Fund has been designed by its managers to track the price and yield, before fees and expenses, of an equity index called the Dow Jones Global Select Dividend Index. The index universe comprises all component companies of the 25 developed-market country indexes. The top 100 highest-yielding companies are selected for inclusion of the index. The fund carries a net expense ratio of 0.58% and has total net assets of approximately $509 million.
Taking a look at the chart, you can see that the recent sell-off has pushed the price of the fund toward the support of its 200-day moving average. This long-term level of support is commonly used by technical traders as a guide for placing buy orders since it is not uncommon to see prices bounce significantly higher after testing its strength. Recent price action suggests that the moving average should be able to hold, and the fund is offering the best risk/reward setup in over two years. (For more, see: Invest in Dividend Aristocrats With This ETF.)
Bullish chart patterns and nearby support levels on key dividend ETFs suggest that it could be time to buy into dividend-paying companies. …read more
Read more here: It’s Time For Yield Seekers to Turn to Dividend ETFs
Category: FGD, DVY, VIG