Pathetic yields in Treasuries, money markets and other traditional safe havens have driven investors into the arms of dividend-themed ETFs. However, predictions of lackluster equity returns and sideways markets in the wake of the financial crisis are also another key factor pushing the trend in dividend funds.
PIMCO dividend product manager Brad Kinkelaar points that historically, during some decade-long stretches, the income from dividends is really all an equity investor has, reports Josh Brown at the Reformed Broker blog.
Some of the largest dividend ETFs include iShares Dow Jones Select Dividend Index Fund (NYSEArca: DVY), iShares High Dividend Equity Fund (NYSEArca: HDV), SPDR S&P Dividend ETF (NYSEArca: SDY), Vanguard Dividend Appreciation ETF (NYSEArca: VIG), Vanguard High Dividend Yield Index Fund (NYSEArca: VYM), WisdomTree Dividend Top 100 Fund (NYSEArca: DTN), WisdomTree Emerging Markets Equity Income (NYSEArca: DEM), PowerShares International Dividend Achievers (NYSEArca: PID) and First Trust Morningstar dividend Leaders (NYSEArca: FDL). [Dividend ETFs to Reap Record Quarterly Payout]
“The Federal Reserve’s low interest rate policy and plans to keep rates low through 2015 have chased yield-hungry investors out of cash investments and into higher-yielding products. ETF sponsors have met investors’ yield demands with aplomb, rolling out new dividend-based products on a regular basis this year,” Benzinga reports.
“The impact of investors’ dividend desires is obvious. Dividend ETFs, new and old, have seen assets under management totals surge,” it notes.