The ETFs have been very popular with investors seeking yield in a low-rate market for bonds.
“Higher taxes on dividends in 2013 were supposed to threaten one of Wall Street’s most popular investment themes in recent years: buying and making money on dividend-paying stocks. But the death of dividend investing seems to have been greatly exaggerated,” USA Today reports.
Investors are relieved that dividend tax rates didn’t rise as much as some had forecast.
“Most investors thought there would be some (fiscal cliff) deal,” said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, in the article. “However, few thought the deal would be as good as it was.”
Full disclosure: Tom Lydon’s clients own DVY.