Dividends appeal to the broad majority of investors. They are particularly appealing in low interest rate environments, like that of 2016, when leaving assets in cash fails to keep up with inflation. The potential for reinvestment through a dividend reinvestment plan is strongly desirable. Combine this with favorable tax treatment and an income-producing stream, and it is easy to understand why investors seek dividends.

Investors wanting to focus on dividend investment may want to consider smart-beta exchange-traded funds (ETFs). These funds follow an alternative weighting strategy from traditional ETFs that track ordinary indexes. Smart-beta ETFs are a mix of passive and active investing that typically use a variety of fundamental and technical strategies. They provide investors who believe markets are priced inefficiently with a cost-effective product that has the objective of maximizing returns, reducing risk and providing diversification.

These four smart-beta ETFs have an investment objective of providing investors with strong dividend exposure.

IShares Select Dividend ETF

The iShares Select Dividend ETF (NYSEARCA: DVY) was launched by iShares in November 2003. The fund’s objective is to track the Dow Jones U.S. Select Dividend Index. It invests the majority of assets in instruments that make up the underlying index. The benchmark index used measures the performance of stocks that have provided consistently high relative dividend yields over a long period. Lockheed Martin Corporation (NYSE: LMT) is the fund’s top-weighted allocation at 4.1%, followed by CME Group Inc. (NASDAQ: CME) with 3.04% and Chevron Corporation (NYSE: CVX) at 2.56%.

The iShares Select Dividend ETF is one of the larger funds of its category with $14.52 billion in net assets. It has an expense ratio of 0.39%, slightly below the category average of 0.45%. As of May 20, 2016, the fund had returned 8.72% year-to-date (YTD), 10.14% over the past three years and 12.22% over the past five years. The ETF pays investors a yield of 3.2%.

SPDR S&P Dividend ETF

The SPDR S&P Dividend ETF (NYSEARCA: SDY) seeks to replicate the price and yield performance of the S&P High Yield Dividend Aristocrats Index. The ETF was formed in 2005. The referenced index is designed to measure the performance of the 50 highest dividend-yielding S&P Composite 1500 Index stocks that have a history of increasing their dividends each year for at least 20 consecutive years. The ETF's top three holdings are HCP Inc. (NYSE: HCP) at 2.68%, AT&T Inc. (NYSE: T) at 1.97% and Chevron Corporation at 1.74%.

The SPDR S&P Dividend ETF has net assets of $13.05 billion and an expense ratio of 0.35%. The fund has a five-year return of 12.45% and a three-year return of 9.96%. It also had an impressive YTD return of 9.59%, as of May 20, 2016. The fund pays a 2.42% yield.

Vanguard High Dividend Yield ETF

The Vanguard High Dividend Yield ETF (NYSEARCA: VYM), created by Vanguard in 2006, adopts a strategy that tracks the performance of the FTSE High Dividend Yield Index. This index consists of stocks that pay above-average dividends. The fund’s top three holdings are Microsoft Corporation (NASDAQ: MSFT) at 4.48%, Exxon Mobil Corporation (NYSE: XOM) at 4.32% and Johnson & Johnson (NYSE: JNJ) at 3.61%.

The Vanguard High Dividend Yield ETF has a low expense ratio of 0.09% and provides a yield of 3.12%. It has $13.52 billion in net assets. As of May 20, 2016, the ETF had returned 12.03% over the past five years, 9.09% over the last three years and 4.24% YTD.

First Trust Value Line Dividend ETF

The First Trust Line Dividend ETF (NYSEARCA: FVD) tracks the Value Line Dividend Index. The index is made up of stocks that pay above-average dividends and have the potential for capital appreciation. The portfolio is constructed with the manager's proprietary ranking system. First Trust launched the fund in 2003. The fund’s three top holdings are equally weighted at 0.6%; these stocks are L-3 Communications Holdings Inc. (NYSE: LLL), Assurant Inc. (NYSE: AIZ) and MDU Resources Group Inc. (NYSE: MDU).

The First True Value Line Dividend ETF has $1.79 billion in net assets with an expense ratio of 0.7%. The fund has five- and three-year annualized returns of 12.22% and 10.68%, respectively. It is outperforming the broader market, and returned 8.20% YTD as of May 20, 2016.

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