4 great SWAN ETFs: RWL, SCHD, DGRO, COWZ

September 18, 2024 09:00 PM PDT | By Invezz

4 great SWAN ETFs: RWL, SCHD, DGRO, COWZ — Image source: Invezz

Invesco S&P 500 Revenue ETF | RWL

The Invesco S&P 500 Revenue ETF is one of the top SWAN ETFs to have in mind. Unlike other market cap-weighted funds like the S&P 500, the RWL ETF focuses on revenues. The idea is that companies with strong revenues tend to do well over time.

Looking at its portfolio, most companies in the fund are in the health care sector followed by financials, consumer staples, consumer discretionary, and industrials. Technology companies form a small part of the fund because most of them are valued based on their revenue growth.

Walmart is the biggest constituent in the fund and is followed by Amazon, UnitedHealth, Berkshire Hathaway, Apple, Exxon, and CVS.

The RWL ETF has an expense ratio of 0.39% and has a price-to-earnings ratio of 15, making it cheaper than the S&P 500 index, which has a multiple of 21. The fund has done well in the last few years. Its year-to-date return was 14.6% while its 12-month return was 22%.

It often does well when the market is going through a rough patch. It dropped by 6% in 2022 when the S&P 500 and Nasdaq 100 indices dropped by double digits.

Schwab US Dividend Equity ETF | SCHD

The Schwab US Dividend Equity ETF is another SWAN ETF, which we have covered in the past few years, as you can read here, here, and here.

The SCHD fund has over $60 billion and an expense ratio of just 0.06%. It also has a five-star rating by Wall Street and has one of the best track record of performance and dividend growth.

The SCHD fund has had a total return of 81.2% in the last five years, helped by the stock appreciation and dividends. It has beaten most of its closest rivals like the Vanguard High Dividend Yield Index (VYM) and the SPDR S&P Dividend ETF (SDY).

SCHD is mostly made up of companies in the financials, healthcare, consumer staples, and industrials. Lockheed Martin, its biggest constituent, has surged to a record high this year as it restarted F-35 deliveries and as global tensions rose.

Blackrock, another key constituent, has done well as its assets have jumped to over $10.7 trillion while AbbVie is doing well as demand rises. However, some top-ten companies like Home Depot and Texas Instrument are not doing well. The SCHD ETF has a P/E ratio, making it highly affordable.

iShares Core Dividend Growth ETF | DGRO

The iShares Core Dividend Growth ETF is another top compounder that has a good track record over the years.

This ETF, which also has a five-star rating by Morningstar, focuses on dividend growth, one of the most important metric to consider. It has over $29.8 billion in assets and an expense ratio of 0.08%.

Most of its funds are in the financials segment followed by healthcare, technology, industrials, consumer staples, and utilities.

The biggest firm in the fund is Johnson & Johnson, one of the biggest names in the healthcare industry with a market cap of over $400 billion. It is a Triple A rated company that has a long track record of growing revenues, profits, and dividends.

The other big name in the DGRO ETF is JPMorgan, the biggest bank in the US that is known for its fortress balance sheet. Other top names in the fund are Abbvie, ExxonMobil, Microsoft, Apple, Chevron, and Broadcom.

The DGRO ETF has done well in the past few years as its stock jumped by over 77% in the last five years. The other alternative is the First Trust Rising Dividend Achievers ETF (RDVY), which has risen by 96% in the same period. A key con is that it has an expense ratio of 0.49%.

Pacer US Cash Cows 100 ETF | COWZ

The Pacer US Cash Cows 100 ETF is a top fund with over $24 billion and an expensive ratio of 0.49%. Its total return in the last five years stood at over 117%, higher than other popular funds like SCHD and DGRO.

Unlike the SPY, which focuses on market cap, and RWL which looks at revenue, COWZ focuses on free cash flow, the most important metric in a company. COWZ holds 100 companies that have a long track record of growing their free cash flows.

Most of its constituents are in the consumer discretionary industry followed by technology, energy, industrials, and healthcare. The most notable names in the fund are 3M, Gilead Sciences, Lennar Corp, and AT&T. 3M stock price has surged this year as investors cheer its turnaround.

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