T. Rowe Price Dividend Growth ETF

TDVG

Market cap $1.24B

For long-term investors craving those “sleep-at-night” returns, actively managed ETFs can be a great solution.

T. Rowe Price Dividend Growth ETF offers active management targeting above-average earnings and dividend growth, aiming to outperform the S&P 500. TDVG features lower beta (0.81) and sector diversification, with reduced tech weighting and increased exposure to financials and industrials. Despite a higher 0.5% expense ratio, TDVG has delivered strong risk-adjusted returns and lower volatility versus passive S&P 500 peers.

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The T. Rowe Price Dividend Growth ETF offers active management focused on dividend and earnings growth, not high yield, with a quality, large-cap tilt. TDVG trades at a premium to dividend peers and delivers strong dividend growth, but its 1% yield and middling long-term performance limit its appeal for income investors. While TDVG's low beta and solid fundamentals are positives, its risk-adjusted returns lag top dividend growth ETFs like VIG, especially over five years.

T. Rowe Price Dividend Growth ETF is an active nontransparent ETF focused on the dividend growth factor. Heavy in IT and financials, TDVG offers attractive dividend growth characteristics, but its yield is clearly too compressed at 1.02%. TDVG's performance has been hardly ideal, as it has lagged IVV, VIG, and DGRO since its inception in August 2020.

It's not often that an ETF rises to more than $1 billion in AUM, but that's just what happened for the active dividend ETF TDVG in the last month. The fund currently sits at about $1.06 billion in AUM per ETF Database data, rising from just under $900 million last month.

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Markets have recovered from a tariff-driven Spring drop, but where will growthier stocks go next? In a year in which active ETFs have taken on even more responsibility in portfolios, active growth ETF investing has performed well.

TDVG offers exposure to high-quality dividend payers with strong growth potential, but its 1% starting yield is lower than many peer ETFs. The ETF's strategy balances growth and income, favoring companies with strong management, healthy cash flows, and a history of dividend increases. TDVG has underperformed both peer dividend ETFs and broad index funds like SPY and QQQ, making it less attractive for most long-term investors.

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