International REITs (NYSEARCA:RWX) and U.S. REITs (IYR, ICF) continue to retain their top spots in performance trend ranking. They are followed by several U.S. stock dividend ETFs. For more details, please refer to the table below and performance page here.
|SPDR DJ Wilshire Intl Real Estate||RWX||10.69%||13.5%||v|
|iShares Dow Jones US Real Estate||IYR||10.4%||10.75%||v|
|SPDR S&P 500||SPY||10.32%||10.45%||v|
|PowerShares HighYield Dividend Achievers||PEY||9.46%||10.44%||v|
|Vanguard High Dividend Yield Indx||VYM||9.04%||9.83%||v|
|iShares MSCI Emerging Markets Index||EEM||9.0%||9.75%||v|
|Vanguard Dividend Appreciation||VIG||8.2%||9.46%||v|
|iShares Dow Jones Select Dividend Index||DVY||8.17%||9.16%||v|
|PowerShares Intl Dividend Achievers||PID||7.18%||9.84%||v|
|SPDR S&P Dividend||SDY||7.07%||7.94%||v|
|First Trust Value Line Dividend Index||FVD||6.76%||7.75%||v|
|iShares Dow Jones Intl Select Div Idx||IDV||5.19%||8.86%||v|
|iShares MSCI EAFE Index||EFA||4.89%||7.9%||v|
|iShares S&P U.S. Preferred Stock Index||PFF||3.77%||3.63%||^|
Though several U.S. stock dividend ETFs (PEY, VYM) are ranked close to the top, we also observe that some of them, like SDY and FVD, have lower trend scores. Looking into this further, we make the following observations:
- The dividend ETFs that hold cyclical stocks, such as financials, are doing well right now, compared with those overweighting in more stable stocks, such as consumer staples. For example, the on PowerShares High Yield Dividend Achievers (NASDAQ:PEY) has 34.4% financial stock holding whilethe SPDR S&P Dividend ETF's (NYSEARCA:SDY) top sector holdings are in consumer staples (19.84%).
- Taking a longer term view, we noticed that SDY's five year annualized return is around 2.78%, compared with PEY's -6% (as of 1/6/2011).
- Similarly, the bottom ranked First Trust Value Line Dividend Index (NYSEARCA:FVD) has five year annualized return is 6.31%. Its top holdings include 21.3% utilities, 15.4% industrial materials and 15.3% consumer staples.
To summarize, as in major asset classes, dividend ETFs also exhibit increasing risk appetite. Furthermore, not all of the dividend ETFs are created equal. It is thus important to have a systematic strategy to decide what ETFs should be invested, as in the Retirement Income ETFs investment plan.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.