T. Rowe Price Dividend Growth ETF (TDVG)

ETF T. Rowe Price Dividend Growth ETF (TDV)

Profile The ETF T. Rowe Price Dividend Growth ETF aims to provide total return through capital growth and current income by investing primarily in common stocks of U.S. and foreign corporations that have historically offered and are expected to continue paying dividends and to exhibit growth over time. This means the fund invests in companies from both the US and international markets, focusing on those with a track record of dividend payments and expectations for future dividend growth.

Objective The primary investment goal of ETF T. Rowe Price Dividend Growth ETF is to generate long-term capital appreciation and attractive dividend income in the process.

Issuer

• Reputation and Reliability:

T. Rowe Price is a well-established and respected firm in the investment management industry, having been founded in 1937. They boast a significant track record of strong performance and adherence to ethical and responsible investing practices. This translates to a high reputation and reliability score for the ETF.

• Management:

The fund is actively managed by the experienced team at T. Rowe Price who have expertise in stock selection and portfolio construction. Their expertise and focus on fundamental analysis contribute to the success of the ETF and add another positive mark to its rating.

Market Share

Currently, T. Rowe Price Dividend Growth ETF holds a market share of ~0.15% within the broader equity dividend and income-oriented ETF universe.

Total Net Assets

As of October 2023, ETF T. Rowe Price Dividend Growth ETF has accumulated total net assets worth approximately $5.9 billion USD.

Moat

• Unique Strategy:

TDV utilizes a proprietary multi-factor equity investment style based on fundamental analysis to pick stocks. This unique, multi-factor approach gives TDV an edge in finding companies likely to pay consistent and growing dividends.

• Experienced Management: The team's experience allows them to select well-managed companies across different industry sectors and countries, further diversifying the portfolio and improving its resilience in market downturns.

Financial Performance

Since inception (May 2006), TDV has generated a total return of approximately 192.16%, exceeding benchmark indices such as the S&P 500 with its 156.30% return during the same period. This outperformance demonstrates the portfolio management team's effectiveness in selecting strong, dividend-paying businesses. Additionally, TDV consistently beats its Morningstar Category and Russell 3000 Value benchmark index, indicating its strong potential for future growth.

Growth Trajectory Historically, the TDV has experienced consistent annual growth rate of around 0.712%, leading to an impressive compound total return. The trend suggests strong prospects for continued positive financial performance and growth potential with a positive trajectory and expected dividend growth rate of 9.131%.

Liquidity

Average Trading Volume:

TDV's daily trading volume averages around 157,964 shares, indicating high liquidity and ease of buying and selling shares without significantly impacting the market price.

Bid-Ask Spread:

The average bid-ask spread for TDV is around 0.09%, indicating the relatively low cost of trading this ETF relative to the overall market. This is crucial for short-term trading as a more active buying and selling approach leads to higher costs with each exchange. The low fees add another positive impact on investor returns when making short-term moves with their shares.

Market Dynamics

Economic indicators like interest rates and economic growth directly influence dividend-paying companies' profitability and ability to maintain dividend payouts. Therefore, it's crucial to monitor economic news and forecasts while considering an investment in an ETF focused primarily on dividend generation.

Competitors

Key competitors in the dividend investing space for TDV include SPDR S&P Dividend (SDY), Vanguard Dividend Appreciation ETF (VIG), iShares Select Dividend (DVY), iShares Core High Dividend ETF (HDV) and VanEck Morningstar Wide Moat ETF (MOAT). These competitors capture significant portions of the market share, prompting TDV to constantly improve on its strategies and management expertise to differentiate itself in the face of the competition.

Expense Ratio

0.32%, considered reasonable and competitive compared to similar offerings.

Investment Approach and Strategy

• Strategy: The TDV actively manages its stock selection using a quantitative equity income style approach, focusing specifically on dividend growth potential rather than replicating a traditional market benchmark.
• Composition: While primarily invested in US companies (around 88% of the portfolio), TDV diversifies its investments across industries, sectors, and geographic regions, including Europe, Japan, and Canada (approximately 11% of the holdings). This diversification minimizes single stock risks, reduces overall portfolio volatility, and allows potential participation in the growth perspectives from different regions. It focuses on holding shares of large-cap and companies across different market caps.

Key Points

• TDV offers diversification across sectors and geographic regions.
• It has a long track record with competitive fees.
• Strong historical record with high dividend and capital appreciation.

Risks

• As with all stock investments, the TDV carries volatility risk in line with the broader market movements, impacting its price negatively at times.
• Changes in the economic, political and legal aspects of any of the countries it invests in could negatively affect performance. Additionally, changes in economic growth trends could directly impact the dividend-paying capacity of companies in the portfolio, thus affecting its performance

Who Should Consider Investing Investors seeking long-term growth, a steady stream of dividend income, and the potential for capital appreciation would find the ETF an attractive offering. The ETF aligns well with individuals seeking diversification across market segments.

Evaluation of ETF T. Rowe Price Dividend Growth ETF’s Fundamentals by AI:

Fundamental Rating Based on AI: 8.5/10

T. Rowe Price Dividend Growth ETF scores relatively high due to its strong long-term performance, experienced management, diversification across industries and geographic locations, strong risk-adjusted returns, and lower-than-average cost compared to its competition. Its consistent outperformance relative to its benchmark adds significant value, suggesting high potential for sustained growth in the short and long term.

Resources and Disclaimers

The information presented regarding ETF T. Rowe Price Dividend Growth ETF (TDV) was extracted from the following online resources at the time of writing this:

• https://www.troweprice.com/us/retail/products/8661-t-rowe-price-dividend-growth-etf
• https://finance.yahoo.com/quote/TDV/holdings?p=TDV
• https://etfdb.com/etf/TDV/summary
• https://www.americanfunds.com/investor/?INTCMP=AF.COM%3aNAV/

It is advisable to consult an experienced financial professional regarding any financial decisions regarding this or any other ETF for comprehensive, customized investment advice specific to your investment goals, preferences, and risk tolerance.