ETF Chart of the Day: Dividend Funds
August 23rd 2011 at 10:21am by Paul Weisbruch, Street One Financial
Market turmoil such as what we have faced recently in equities often causes “value” investors to come out of the woodwork and start hunting for potential bargains.
One investment strategy that seems to gather steam when equity indices have fallen sharply from their highs is that of managers who are searching for dividend yield. In essence, managers are looking to invest in names that have paid consistent and/or high dividends over time, but since share prices have been battered recently across the board, these equity names appear much more desirable from a yield standpoint than they may have seemed just a few weeks ago.
For those investors that are concentrating on the amount of dividend yield that they can potentially capture, but are not too concerned with the consistency of the payouts, there are a number of exchange traded funds in the current landscape. [International Dividend ETFs]
Included in this ETF list are HDV (iShares High Dividend Equity), SDIV (GlobalX SuperDividend), ABCS (Guggenheim ABC High Dividend) and SDY (SPDR S&P Dividend).
On the other hand, those that are seeking a steady, consistent dividend payout based on the historical track records of the underlying securities can consider DVY (iShares DJ Select Dividend), PFM (PowerShares Dividend Achievers), PEY (PowerShares High Yield Equity Dividend Achievers) and VIG (Vanguard Dividend Appreciation).
Other potential plays that are focused on a dividend based strategy include FVD (First Trust Value Line Dividend), FDL (First Trust Morningstar Dividend Leaders), as well as dividend weighted ETFs from WisdomTree such as DEM (Emerging Markets High Yielding Equity), DGS (Emerging Markets SmallCap Dividend), DTN (Dividend Top 100), DLS (International SmallCap Dividend), DFJ (Japan SmallCap Dividend), DON (MidCap Dividend), DES (SmallCap Dividend), DTD (Total Dividend), DOO (International Dividend ex-Financials), DIM (International MidCap Dividend), DOL (International Large Cap Dividend), DTH (DEFA High Yielding Equity), DFE (Europe SmallCap Dividend) and GULF (Middle East Dividend).
Each one of the ETFs mentioned above has a unique investment methodology and thus different risk characteristics and sector exposures, so it is prudent for the investment manager to delve into the nuances of these products in determining which ones are a potential fit. [Emerging Markets Dividend Funds]
iShares High Dividend Equity