In this article, we discuss 5 best ETFs to diversify your portfolio and avoid risks. If you want to see more exchange traded funds in this list, click 10 Best ETFs to Diversify Your Portfolio and Avoid Risks.
5. Schwab U.S. Dividend Equity ETF (NYSE:SCHD)
Schwab U.S. Dividend Equity ETF (NYSE:SCHD) aims to track the total return of the Dow Jones U.S. Dividend 100 Index. The fund offers potential tax efficiency and an expense ratio of just 0.06%. As of September 21, Schwab U.S. Dividend Equity ETF (NYSE:SCHD) has net assets amounting to over $36 billion, and the SEC 30 day yield is 3.51%. It is one of the best ETFs to diversify a portfolio, given its solid distribution yield and the robust portfolio.
Texas Instruments Incorporated (NASDAQ:TXN) occupies the biggest position in Schwab U.S. Dividend Equity ETF (NYSE:SCHD)’s portfolio, representing 4.12% of the total securities. It is a legacy American semiconductor firm that sells its products to electronics designers and manufacturers worldwide. On September 15, Texas Instruments Incorporated (NASDAQ:TXN) declared a $1.24 per share quarterly dividend, a 7.8% increase from its prior dividend of $1.15. The dividend is payable on November 15, to shareholders of record as of October 31. The board of directors also authorized repurchasing another $15 billion in common stock over time. This is in addition to the $8.2 billion of priorly authorized repurchases that remained at the end of the second quarter of 2022.
Among the hedge funds tracked by Insider Monkey, Jean-Marie Eveillard’s First Eagle Investment Management is the leading stakeholder of Texas Instruments Incorporated (NASDAQ:TXN), with 3.5 million shares worth over $542 million. Overall, 55 hedge funds were bullish on the stock at the end of June, up from 46 funds in the earlier quarter.
Here is what Davis Opportunity Fund has to say about Texas Instruments Incorporated (NASDAQ:TXN) in its Q4 2021 investor letter:
“Within technology and communication services, we own a number of online businesses and semiconductor related companies, including Alphabet, Amazon, Intel, Applied Materials and Texas Instruments. Within the realm of high technology, we believe that leadership positions reflect enduring and widening competitive advantages over smaller competitors, with few exceptions. This is because online businesses, as well as semiconductor companies, benefit from economies of scale. An online search and advertising engine will, in general, be more profitable per unit of cost as it grows larger in terms of users and advertising dollars. It is a hub-and-spoke model, in other words, where it is generally not necessary to grow expenses at the same rate that revenues grow beyond a certain threshold. Therefore, returns on capital tend to be higher, the larger and more dominant the online search company is.”
