As financial stocks rise, DIVS is ready to take advantage.

 

This article was originally published on ETFTrends.com.


Since the beginning of the year, investors have been flocking to emerging ETFs and stocks, in favor of more lucrative investments from big tech, sectors including finance and energy.


Financial stocks gained broadly on Monday, with the sector leading all S&P 500 sectors, up 3.8% by midday. This advantage JPMorgan Chase & Co. Gained after expanding its outlook on net interest income, pushing the stock to its biggest gain since November 2020. Other financial stocks that are rising today include Citigroup Inc., Bank of America Corporation, Wells Fargo. & Co., among others.


SmartETFs Dividend Builder ETF (DIVS), managed by Guinness Atkinson Asset Management, is a perfect fit for investors looking for meaningful exposure to finance, according to VettaFi, 14.25% of Sector Holdings Fund. Is. Dividend ETFs are highly attractive in the current environment, providing investors with generous yields and flexibility in the face of rising inflation and rising rates.


Some sectors of the stock market benefit from higher rates and are more sensitive to interest rate changes than others. Finance is a well-known hedge, as the sector benefits from higher interest rates through increasing profit margins.


The financial sector has historically been the most sensitive to changes in interest rates. As interest rates rise, so does the sector's profit margins, and thus banks, insurance companies, and money managers, among others, have benefited the most from historically high interest rates.


So far in 2022, DIVS has had dividend updates from 17 of its 35 holdings, and despite the challenging current economic environment, zero companies have announced a reduction or cancellation of dividends, according to SmartETFs.


According to SmartETFs, 15 companies have announced an increase in their profits from 2021 to 2022, and two companies have declared flat dividends compared to 2021. This profit growth reflects the pace of the past, which has seen zero cancellations in 2021 and 2020.


The story continues.


Visit the Dividend Channel for more news, information and strategy.

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