| WisdomTree UK Quality Dividend Growth ETF

9th Aug by FREng

6 comments 428 reads

Mark Carter Joined 2010 864 posts now

So perhaps the secret, if there's any, is to hold good quality companies at reasonable prices, and hold.

Sane, sensible, good quality. Decent returns on capital, limited debt, reasonable divvies, reasonable size, with at least some room to grow. Nothing flashy.

For those interested, I discovered WisdomTree UK Quality Dividend Growth ETF recently. Their top 10 holdings are II 70, ANTO 68, RELX 97, AZN 87, EXPN 83, ULVR 70, FERG 92, GSK 87, RIO 86, DGE 81. The numbers are the quality scores I noted down at the time. Obviously I'm not recommending anything, just throwing it out there for your consideration.

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About the Author

FREng

Premium Member

40 years experience in the software industry. Former Deloitte & Touche consultancy partner.

6 comments

Gung Ho

9th Aug

I just had a quick look at the WisdomTree UK Quality Div Growth UCITS ETF GBP (LON:UGRW) Factsheet - what I don't like about it is that the stocks selected are 'ESG screened'. It looks like the dividend is about 1.5%.

I have a large holding in iShares UK Dividend UCITS ETF GBP (Dist) (LON:IUKD). It is not 'ESG screened' and so contains tobacco, energy and bank stocks. Top 10 holdings: HSBC, Imperial Brands, BAT, Vodafone, RIO, Nat West, Lloyds, LGEN, Aviva, Shell - very different to UGRW. The dividend is about 5.2%.

I prefer IUKD as a long term safe (?!) holding with a good divi, but personal choice as always.....

Tim Boucher

9th Aug

IUKD looks good - OCF of .4 is less than stamp, and decent divi.

jjis

9th Aug

Yes, it is quite a decent strategy & one I have employed myself in individual stocks using my own system for quite a few years with a fair degree of success. Not sure I would recommend the Wisdom Tree fund mentioned in the post as it seems quite small in asset terms. While the I Shares one - IUKD has been a pretty poor performer as it selection process is I believe driven by yield, which is not necessarily the best way to pick income stocks. You do though get a good yield off it if that's something you want, but this seems to come at the expense of capital performance.

ETF's are not the only fruit in the UK equity income space - personally apart from picking my own stocks, I tend to prefer investment trust with Law Debenture (LON:LWDB) Law Debenture being a good performer, albeit it is usually on a small premium as a result. While something like Edinburgh Investment Trust (LON:EDIN) Edinburgh Investment Trust has done well since Woodford was replaced by Liontrust as the manager about 3 yeas ago. Otherwise Merchants Trust (LON:MRCH) Merchants Trust does OK by focussing on the bigger end of the market. A few others like City of London Investment Trust (LON:CTY) City of London & JPmorgan Claverhouse Investment Trust (LON:JCH) JPM Claverhouse have a long history of increasing dividends. Finally Temple Bar Investment Trust (LON:TMPL) Temple Bar is doing better in recent years after they appointed some respected value manager if that's a style that attracts you.

Gung Ho

9th Aug

Interesting info, thanks. I agree about the IUKD stock selection being based on yield rather than the growth potential of the companies - I'll hold while I'm happy with the Top 10 and while the outlook for the FTSE350 looks positive (the 50 stocks they hold are from the FTSE350).

Mark Carter

10th Aug

For those interested in quality UK companies, I have a small list: WS Whitman UK Sm Cos, Montanaro UK Smaller Companies Investment Trust (LON:MTU), VT Downing Unique Opps (https://www.trustnet.com/facts...), Abrdn UK Smaller Companies Growth Trust (LON:AUSC), Finsbury Growth & Income Trust (LON:FGT), Lindsell Train Investment Trust (LON:LTI) .

You can see that the VT trust invests in high-quality companies, like Diploman, Bloomsbury, 4imprint, Auto Trader, Games Workshop, etc.

KevinS1

11th Aug

HI All,

I have about 5% of my PF in WisdomTree UK Quality Div Growth UCITS ETF GBP (LON:UGRW)

I think it was Ian Shadrack who first bought this to my attention back in Nov last year - he has a YouTube channel and publishes some interesting videos on different funds/UT's.

Initially it was their Global Quality ETF that caught my attention - WisdomTree Global Qual Div Gro UCITS ETF USD Acc (LON:GGRG) which to me seemed to be a very solid performer over a long period of time - I also have about 5% in this.

Their holdings are as follows;

I think there is a distributing version, but GGRG is the accumulation version.

The UK equivalent WisdomTree UK Quality Div Growth UCITS ETF GBP (LON:UGRW) yields about 3.5% (they were only launched in Nov 23 and so far have paid divis in Jan & July).

Since launch in Nov they are up 18% and YTD since Jan it is 8%.

Whilst they are still a very small ETF (about £3m) they are growing and I can see this continuing until they are quite sizeable - it is a pretty good strategy in my eyes.

Here is the link to the JustETF site which has all of the info. The Wisdom Tree website is also full of info on both of these ETF's.

https://www.justetf.com/uk/etf...

GGRG costs are 0.38% & UGRW 0.29% - plus platform fees. I consider this to be relatively cheap for a good collection of Quality Co's.

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FREng

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