Investors hunting for dividends may have been left disappointed this year. Dividend payouts are set to decline 21% this year from 2008. But 2010 could bring better opportunities for dividend-focused exchange traded funds (ETFs).
Dividend-yielding stocks tended to lag the broader stock market in this year as the market showed its preference for high-risk and tech companies, which generally don’t pay dividends. That’s on top of the wreckage of the financial crisis, which had many financial firms cutting payouts. [Why dividends have outperformed growth.]
In fact, from September 2008 until March 2009, companies in the S&P 500 stopped paying $65.4 billion in dividends. Of that, 68% was because of cuts at financial firms, Ben Steverman for BusinessWeek reports.
Dividend stock strategies are most popular among conservative investors seeking consistent income. [Earning dividends with international ETFs.]
Those who mind such things are predicting that 2010 could mark a rebound. Why? Many of the larger dividend-paying companies have already made their huge cuts. But experts caution that it could be around 2013 when dividend payouts hit their previous levels. [Why dividends are good for a portfolio.]
The key? The economy
will have to remain strong and continue to improve.
Instead of going for dividend-paying stocks, why not use a dividend ETF? The fund managers have done the legwork for you, looking for high-quality names that have kept up their dividend payouts. You can capitalize on their expertise with just one fund, including the ones listed below.
For more stories about dividends, visit our dividend ETF category.
- SPDR S&P Dividend ETF (NYSEArca: SDY): up 18.4% year-to-date; yields 4.1%
- WisdomTree Large-Cap Dividend (NYSEArca:DLN): up 17.6% year-to-date; yields 2.8%
- iShares Dow Jones Select Dividend Index (NYSEArca: DVY): up 11.7% year-to-date; yields 4.2%