New dividend exchange traded funds have hit the market this year in response to investor interest. The low-yield environment in bonds has given dividend-paying companies the spotlight, especially as some have higher yields than the 10-year Treasury note.
Some of the new funds that have hit the market are showing some divergence after their first few months of trading, notes Don Dion for The Street.
Some of the newer dividend ETFs performances’ have not fared as well as the more seasoned funds. A look at the funds holdings and the market conditions can be insightful, Dion notes. [Dividend ETFs Set to Benefit From Higher Payouts]
The performance of the $6.8 billion iShares Dow Jones Select Dividend Index ETF (NYSEArca: DVY) against the S&P 500 has been catching investor’s interest, along with the $5.9 billion SPDR S&P Dividend ETF (NYSEArca: SDY). [More Dividend ETFs Hit the Market as Stocks Yield More Than Bonds]
The iShares High Dividend Equity Index Fund (NYSEArca: HDV) is similar to the make-up of DVY, however, the fund is weighted heaviest toward health care, Dion points out. While DVY weights heavier to utilities, it is notable that HDV has outpaced its predecessor and the broad market.