A Closer Look At Dividend ETFs

There are a variety of dividend ETFs available. However, risk and return objectives vary. Dividend ETFs perform differently since they track indexes from different providers and some may be concentrated in specific industries. New Jersey's Star Ledger newspaper points out that financial stocks are a common holding in dividend funds, and they can be sensitive to interest rates and inflation.

The iShares Dow Jones Select Dividend (DVY) was the first dividend ETF and invests in 100 of the highest yielding dividend securities in the Dow Jones U.S. Total Market Index. It is currently up 2% for the year.

First Trust Morningstar Dividend Leaders (FDL) is relatively new and invests in top dividend companies that show dividend consistency and sustainability. It is also up 2% for the year.

State Street SPDR Dividend (SDY) also another new ETF is up 2% this year. This ETF invests in long-term dividend paying stocks.

For full disclosure, DVY is held in some of Tom Lydon's managed accounts.

DVY vs. FDL vs. SDY 1-year chart:

Comments

[d_teller:]

You might want to add AGD, and also the newer AOD, to any future comparisons. These are from Alpine; and AGD is stuctured similarly to its AGDVX mutual fund, while AOD just launched and will try a completely global dividend capture strategy. The Alpine funds have a much higher dividend payout than the three ETF's, above ... and some tax advantage for non-shelterd accounts, but I haven't compared the aftertax+after expense yields.

2007 Feb 07 08:39 PM

[Javaharv:]

What about the long list of Wisdomtree's dividend paying ETFs?

2007 Feb 08 08:04 AM

[Krawler2:]

Note that the stocks on the largest US indices (Dow Jones, NASDAQ 100) have pretty low dividend yields.

NASDAQ: www.topyields.nl/Top_d...

Dow Jones Industrial: www.topyields.nl/Top_d...

Check out this daily updated overview of the top 100 highest dividend yielding stocks here:

www.topyields.nl/Top_1...

Enjoy!

May 06 06:05 PM