WRKO>Audio & Video on Demand>>Adam McCullough (Morningstar, QDF)

Adam McCullough (Morningstar, QDF)

Apr 23, 2018|

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

Joining us now on the line is Adam Hall from Morningstar here to talk about an ETF today. The stock talk out of thank you for joining us I kept threatening and we're talking about his the other lectures quality dividend ETF is that great. There's mrs. Judy yes the Fletcher is quality dividend fund and with this one does it looks or high dividend paying stock but also mixes and quality you're looking at names that. Are able to keep the dividend payment and are at risk of cutting that in future. Looking at fear that they tend to focus on from a company perspective we talking large cap mid cap small cap were to where they tend to concentrate most heavily. Yeah it's it's mostly large in the gaps in this search with 12150. Largest stocks in the US market. And then it Whittle down names based on their dividend yield compared to the index and and also based on they're quoting metrics so looks more. Return on equity return invest capital. And it the other big thing that that this one doesn't it done. Limit its sector instinct stock bet that was not gonna load up on utilities or reach rather hide pain doctors. And does it it sounds like a primarily stays in the US then. Yeah yeah almost all the pulled into based in the US Philip it's it's going to. Keep. The US focused but there's other options from boxers but also target international market. Now when we talk about the term quality dividend you'd assume it's paying out yield that's higher than the S&P 500 which I believe is right around one point 85 right now. What's the yield on this ETF. To be indicated yield of going forward based on its current holding is about 3.2 percent. You are right would ask Kia to around one point eight and then it. Better compares and probably for this find is that Russell 1000 value that about two and a half percent this is still. Higher than that but also if it's. Not mine been chasing yield and buying companies that are are at risk of into the game. Going towards dividend payers and typically it adds a little bit of a valued tilt towards a portfolio which can make it stand up a little bit better during a downturn. What is this portfolio experience as far as volatility compared to the broad market. So that's that's. Part of that is the little living not of responded that it is untested so it's just been around since 2012 there's about five years of life. Performance history yeah but be. Some construction process limit the risk significantly by reining in single stock to sector bet though. Should probably perform like the average aren't and that art value category during down term but that's that is still untested leader had lied. Action of this aren't in it down market. What's the out of the cost when it comes to expenses and owning this fund. Yes this started actually very cheap or actively managed by the charges 37 basis points year. But that said there are much cheaper. Dividend targeting fund and the art site category for example or swap it on but it turns seven basis point though. You know waited she couldn't respond to respond to grant the thing is too expensive. Over already see this fitting into someone's portfolio potentially. Yeah I mean if you're looking for and equity income I've played this is a great bunt on. The other benefit of this is that. But it does use bored looking metrics it's been out the last quality. Names from the index is that. It is able to avoid some stocks that have cut their dividend payment separate sample did it dropped ConocoPhillips and early 2016. When that company cut dividend payment though it is looking now for those names that they are at risk for cutting their pain it would help Paul burka. Very good Adam thank you very much of the time today we appreciate it. Anna Nicole for morning start talking about the flex shares quality dividend ETF the ticker on that. Should you want to do little bit of research on your own is Q the path. One of the things you would learn if you were researching it on your own is that it hasn't beat. A point 96. And that would mean I think that's pretty volatile. Drip edge and not as volatile as the overall market but it's not like he balanced mutual fund it's gonna have some risk to succeed. Yet that this is a fun that you are expecting to move around significantly. It is going to put out higher income than the broad market in a lot of cases. But it doesn't necessarily have anything in there that axis ballast in order to potentially stem a fall if you do see. The market correct like we did in the last couple months we see something similar to early February odds are you going to see a significant dip in this portfolio in the short term. See you could buy something like that in your individual retirement account. And then when you turned seventy it's gonna produce some income for you when you need those required minimum distribution to the current dividend yield on it was love that it's going to be north 3% next year.