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Summary

  • Our ongoing look at 2 different portfolios; ETFOP and BTDP.
  • The individual stocks held in the BTDP are the major holdings of each ETF held in the ETFOP.
  • The ETFOP is for passive investors, and the BTDP is for active dividend income investors.

Time flies when we keep having fun, and believe it or not, this is our 4th update comparing the passive ETF approach to an active dividend growth stock portfolio. While I made no changes in the stocks held, that does not mean I have not been monitoring and considering adding a few, but I have the feeling that those interested in this non-scientific experiment would prefer that everything simply remain the same.

In that way, both portfolios will perform on their own, with the results showing which way is more profitable over time.

The ETFOP Update

The ETFOP currently consists of the following ETFs: Vanguard High Dividend Yield Index ETF (NYSEARCA:VYM), SPDR Dividend ETF (NYSEARCA:SDY), WisdomTree LargeCap Dividend ETF (NYSEARCA:DLN), Vanguard Dividend Appreciation ETF (NYSEARCA:VIG) and Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD).

SymbolSharesYieldDividendYrly. IncomeShare PriceTot. CostTot. Value30-Jun
VYM3502.80%$1.85648$62.442185423209$66.31
SDY3502.20%$1.70595$73.182561326806$76.59
DLN3502.30%$1.63571$66.712334924783$70.81
VIG3501.90%$1.49522$75.442639927283$77.95
SCHD3502.60%$1.00350$36.611276413395$38.27
xTotals2.36%x2686x109979115476x

As you can see, when compared to last month's update, the dividend income, on an annualized basis, has increased to $2,686, and the total value of the portfolio jumped to $115,46 from $112,514 in June, or a roughly 3% overall increase. Not too bad for sipping iced tea and not tuning in to CNBC.

The overall performance from a share price basis has increased nearly 6% since we launched our little experiment, and given the fluctuations of the market, I find that this increase, as well as the bump in the annual dividends paid is quite impressive. I believe any passive investor who has no desire to follow the markets that closely would be very pleased thus far.

The BTDP Update

The BTDP consists of the following stocks: AT&T (NYSE:T), Exxon Mobil (NYSE:XOM), Johnson & Johnson (NYSE:JNJ), Coca-Cola (NYSE:KO), Procter & Gamble (NYSE:PG), Altria (NYSE:MO), McDonald's (NYSE:MCD), Chevron (NYSE:CVX), Apple (NASDAQ:AAPL) General Electric (NYSE:GE), Ford (NYSE:F), Microsoft (NASDAQ:MSFT), Wal-Mart (NYSE:WMT) and Pfizer (NYSE:PFE).

SymbolSharesOrig. YieldDividendYrly. IncomeShare PriceTot. CostTot. Value30-Jun
T3005.60%1.8455231.95958510068$35.36
XOM1002.80%2.7627690.05900510068$100.68
JNJ1003.10%2.828086.78867810462$104.62
KO2003.00%1.2224437.2174428472$42.36
PG1003.10%2.5725775.7175717859$78.59
GE3003.60%0.8826424.3573057884$26.28
MCD1003.50%3.2432493.02930210074$100.74
CVX1003.60%4.28428111.141111413055$130.55
AAPL1052.25%1.8819775.2178979758$92.93
MO1005.20%1.9219237.7137714194$41.94
F4003.20%0.520015.1560606896$17.24
MSFT2002.80%1.1222440.1680328340$41.70
WMT1002.50%1.9219276.1176117507$75.07
PFE2003.20%1.0420832.1864365936$29.68
Div.Cashxxxxx633
xx3.60%x3838x109809121,206x

Interestingly, this portfolio (which is my own preference) only increased by a minimal amount in June. Total value less than 1%, and dividend income on an annual basis by less than $100 for the month. There were also no scheduled ex-dividend dates for any stock in the portfolio.

That being said, the overall value of this portfolio has increased by about $11,400 since we began, or by nearly 11%. I am a bit disappointed for the results in overall value for June in the BTDP, but I will still stand by my contention that this portfolio will outperform the ETFOP over the long run.

The Bottom Line

I have to give the ETFOP a decisive victory for June. Naturally, it has quite a long way to go to overcome the four-month performance of the BTDP in "both" annual dividends and total value, as those numbers do speak for themselves.

While many of your comments have been suggestions as to either the ETFs held or the stocks owned, I would simply say that the stocks owned are all in each of the ETFs, and the comparison appears to be quite fair from where I sit.

If we were going to truly actively manage the BTDP, I probably would have added, adjusted, rebalanced, or even chased after some higher-yield stocks. Of course, I am pretty sure that everyone would point out that I was not being fair enough to the ETFOP, which probably would be quite accurate.

The month goes to the ETFOP, and the four-month period goes to the BTDP.

Any ideas on how to tighten this experiment up a bit further?

Source: Retirement Strategy: The ETF-Only Portfolio Vs. Buy The Dips Portfolio - Update For June