There were some compelling data points out Monday that underscore just how much the dividend investing phenomenon has benefited exchange traded funds.
S&P Dow Jones Indices said “Net dividend increases rose $12.7 billion during the fourth quarter of 2013 for U.S. domestic common stock, compared to an $8.4 billion increase in the fourth quarter of 2012. 885 dividend increases were reported during the quarter, significantly lower than the tax incentivized 1,266 companies which raised dividends in 2012, but up 36.4% from the 649 companies which raised dividends in 2011.” [Dividends Rise, but Payout Ratios Remain Low]
BlackRock (NYSE: BLK) added that dividend ETFs pulled in $29 billion last year, meaning payout funds accounted for the majority of inflows to smart beta ETFs. [ETF Inflows Reach a Record in 2013]
Some dividend indices impressed as well. The Dividend Achiever index family had an impressive year, with the NASDAQ US Broad Dividend Achievers Index returning over 26% in 2013. In addition, the NASDAQ US Dividend Achievers Select Index, which is comprised of a select group of securities with at least ten consecutive years of increasing annual regular dividend payments, rose over 29%. Finally, the NASDAQ US Dividend Achievers 50 Index, the narrowest of the three indexes, returned over 31% in 2013, according to NASDAQ OMX Global Indexes.
1-Year Performance Chart
Chart Courtesy: NASDAQ OMX Global Indexes