Best ETFs For Trading: Dividend And Factor Funds

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These 14 funds are the cheapest to own for a brief stint.
The usual reason for buying a dividend-rich fund is to get income for retirement. But exchange-traded funds can also be used for speculation. One way to bet on a downward blip in interest rates, for example, is to own a fund that owns high-yielding, rate-sensitive stocks.
The big products in the dividend category are from Vanguard: its Dividend Appreciation ETF (VIG) and its High Dividend Yield ETF (VYM). But they aren’t the cheapest. Edging them out in the cost comparison are Schwab U.S. Dividend Equity (SCHD) and iShares Core High Dividend (HDV).
The cost shown assumes a $10,000 position bought, held for three months and then sold. It reflects the fund’s expense ratio, its cost offset from securities lending and the bid/ask spread.
There’s a separate grouping here for “factor” funds, which aim to capture a market-beating return by owning shares with such supposedly favorable attributes as low volatility or positive momentum.

3-month Holding Cost*

Liquidity Score

Ticker
Exchange-traded fund

Dividend

SCHD
Schwab US Dividend Equity
$4.35
A

HDV
iShares Core High Dividend
4.40
A

VIG
Vanguard Dividend Appreciation
4.73
A

VYM
Vanguard High Dividend Yield
4.74
A

SPYD
SPDR Portfolio S&P 500 High Div
5.22
A

DGRO
iShares Core Dividend Growth
5.69
A

Factor

USMV
iShares Edge MSCI Min Vol USA
5.56
A

MTUM
iShares Edge MSCI USA Momentum Fctr
5.92
A

QUAL
iShares Edge MSCI USA Quality Factor
6.77
A

GSLC
Goldman Sachs ActiveBeta US LgCp Eq
6.92
B

RSP
PowerShares S&P 500 Equal Weight
7.07
A

SPLV
PowerShares S&P 500 Low Volatility
8.50
A

SPHB
PowerShares S&P 500 High Beta
9.23
A

PRFZ
PowerShares FTSE RAFI US 1500 Sm-Mid
9.89
B

*Cost of a $10,000 position held for three months. Reflects bid/ask spread, expense ratio and cost offset from securities lending.
Data sources: Morningstar, Bloomberg, fund distributors
For the rankings by ten-year holding costs, see Best ETFs: Dividend Funds and Best ETFs: Factor Funds.
For links to short-term rankings in other categories, see Best ETFs for Trading.

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