Groovy Dividends, Baby! Are Dividend ETFs the New Shag-adelic Investment?

Yeah Baby! Dividend Stocks Are Back in Action!

Oh behave! It seems those marvelous dividend stocks are back in vogue darling! With all the market volatility investors are looking for a bit of stability something that screams 'shag a licious' and 'reliable' all at once. Enter dividend stocks providing peace of mind like a cup of English tea on a Sunday morning. It's not just growth anymore; it's about that sweet sweet income baby!

Top of the Pops: The ETF Edition

There are over 100 dividend focused exchange traded funds (ETFs) but like a good shag the best stuff is concentrated at the top. We're talking Vanguard Dividend Appreciation ETF (VIG) Schwab US Dividend Equity ETF (SCHD) and iShares Core Dividend Growth ETF (DGRO). These are the big boys baby! They've got more assets than Dr. Evil has schemes. Top of the league includes Vanguard Dividend Appreciation ETF with $81 billion Schwab U.S. Dividend Equity ETF with $65 billion and Vanguard High Dividend Yield Index ETF coming up third with $54 Billion. Groovy!

Actively Managed: A Little Bit Risky a Little Bit Naughty

As the actively managed ETF space grows like my libido in the '60s there are an increasing number of actively managed dividend ETFs such as the T. Rowe Dividend Growth ETF (TDVG). These funds are like a 'swingers' party hoping to find a better mix of capital appreciation and yield. TDVG one of the first ETFs from T. Rowe Price manages over $700 million in assets. It's risky baby but could be oh so rewarding!

Tech Baby! It's Everywhere!

Even if you're trying to avoid tech stocks – perhaps you've had one too many bumpy rides – you can't escape them! The biggest tech companies are now the biggest dividend payers. TDVG's top holdings are Apple and Microsoft each at around 5%. It's like trying to avoid shagging in the '60s; nearly impossible baby! But dividend ETFs like TDVG can give you tech exposure without going full throttle. As Todd Sohn from Strategas said "We've finally reached a point in the cycle where overweighting the 'Mag 7' all of them has hit its limit" Yeah baby yeah!

Follow the Money: The Inflows Are Groovy

Tim Coyne from T. Rowe Price mentioned that income and dividend payments have led to strong inflows across the ETF industry's dividend funds. With over $10 billion flowing into dividend ETFs year to date it's keeping pace with other "factor based" approaches. Everyone wants a piece of the action baby! It's like the queues outside a discotheque on a Saturday night! Though still Value and Growth ETFs took a slight lead with $12 and $15 billions respectively.

Yield Alone? That's Just Crazy Man!

Bob Pisani from CNBC warns against buying a dividend fund based on yield alone. It's like picking a shag partner based solely on their looks; you might get burned! The highest dividend payers might be the ones most vulnerable to dividend cuts. You need a balance baby! A combination of consistent dividends and capital appreciation. So find the right blend and get ready to boogie!