It should be noted, that dividend-yield-weighted or dividend-per-share weighted indexes have no scaling mechanism for company size and hold small-cap and mid-cap characteristics of equally-weighted indexes. [The Value of Mid-Cap ETFs.]
One would think that stocks with below-average dividend yields are reinvesting earnings back into their business so as to add higher dividend growth over the long term, or vice-versa, but WisdomTree argues otherwise. WisdomTree’s research found that a basket of higher-dividend-yielding stocks may actually produce higher dividend growth than the S&P 500.
There are dozens of dividend ETFs in the ETF Analyzer, which can be sorted by yield, expense ratio and performance. Some dividend ETFs include:
- PowerShares Dividend Achievers (NYSEArca: PEY)
- WisdomTree LargeCap Dividend Fund (NYSEArca: DLN)
- Vanguard Dividend Appreciation (NYSEArca: VIG)
In State Street Global Advisors‘ recent snapshot report, the firm found that dividend investing remains popular, with the SPDR Dividend ETF (NYSEArca: SDY) increasing $3.5 billion in assets and year-to-date inflows of $2 billion, reports Murray Coleman for Barron’s.
For more information on dividends, visit our dividend ETFs category.
Max Chen contributed to this article.