Invesco S&P 500 High Dividend Growers ETF

DIVG

Market cap $11.1M

Picking individual stocks takes a lot of work, and for all of that effort, you still may underperform the stock market.

Do you like the idea of ever-growing dividend income, but aren't interested in keeping tabs on a portfolio of individual stocks? There's a simple solution: Own a handful of exchange-traded funds (ETFs) instead.

The new Invesco S&P 500 High Dividend Growers ETF selects 100 companies from the S&P 500 Index that have increased or maintained dividend per share payments for five years. DIVG has a 0.39% expense ratio and only $2.8 million in assets under management with 100K shares outstanding. I estimate the ETF yields 3.44% at current prices. DIVG is a solid income play, as its Index's unique calculation for forecasted dividend growth ends up emphasizing dividend yield more. However, there are no additional quality screens.

The new ETF DIVG looks to pick about 100 stocks with the highest forecasted dividend yield growth from the eligible stocks in the index. Stocks will have a forecasted dividend yield greater than zero and continue a dividend yield every year for at least five consecutive years.

Invesco has launched two ETFs: one focused on strong and forecasted high dividend growth, and another targeting strong cash flow. The two funds add to the firm's lineup of smart beta ETFs.