IShares Select Dividend ETF DVY aggressively pursues dividend income by selecting and weighting its holdings by dividend yield. This pulls it toward riskier names, which may have deteriorating fundamentals and thus be prone to future dividend cuts. The fund’s benchmark applies some backward-looking screens to new additions to ensure dividend durability, but the same requirements don’t apply to existing holdings. The inherent risk of this approach limits its Morningstar Analyst Rating to Neutral.
Will DVY outperform in future?
Get our overall rating based on a fundamental assessment of the pillars below.
The Process Pillar is our assessment of how sensible, clearly defined, and repeatable DVY’s performance objective and investment process is for both security selection and portfolio construction.
The People Pillar is our evaluation of the DVY management team’s experience and ability. We find that high-quality management teams deliver superior performance relative to their benchmarks and/or peers.
The Parent Pillar is our rating of DVY’s parent organization’s priorities and whether they’re in line with investors’ interests.