WTHYE delivered superior trailing 12-month dividend growth over the 1- and 3-year periods, while Achievers Select was superior over the 5-year period and since WTHYE’s live inception on 6/1/2006. From 6/1/2006 through 9/30/2012, the landscape of dividend-paying firms in the U.S. was influenced by financial firms cutting their dividends during the financial crisis, information technology firms initiating and growing their dividends strongly, and financial firms re-initiating and growing their dividends as the crisis abated. Essentially, while Achievers Select had less exposure to financials in the fall of 2008 (the start of the crisis), WTHYE has been able to generate greater exposure to recent dividend growers that have not yet been paying dividends for 10 years (much less growing them for that many years). If achieving strong dividend growth in different market environments is the goal, it may make sense to consider an analysis of what occurs when blending these two approaches together, as each has delivered superior dividend growth during different periods.
To discover more about why these indexes performed so differently or what their combined performance might look like, read the full commentary.
Find out more about our dividend approach to equities.
1Period is June 1, 2006, through September 30, 2012, limited to the live history of WisdomTree’s U.S. Dividend Indexes.
Jeremy Schwartz is director of research at WisdomTree Investments (NasdaqGM: WETF). This post was republished with permission from the WisdomTree blog.