Right Sector Mix Lifting This Dividend ETF

Over the past 90 days, the top two sector SPDRs are the Utilities Select Sector SPDR (NYSEArca: XLU) and the Energy Select Sector SPDR (NYSEArca: XLE) and the competition is not even close.

In a sign of just how strong the utilities sector has been, XLE is up 9.1% since Jan. 17, but that trails XLU by 280 basis points. And in a sign of the energy sector’s rising strength, XLE has been more than twice as good as the third-best SPDR, the Consumer Staples Select Sector SPDR (NYSE: XLP). [Old Energy ETF Roars Back]

Combine the dividend and value reputations of the energy and utilities sectors, and it would be logical to assume that plenty of dividend ETFs are benefiting from the rise of those sectors. The Global X SuperDividend U.S. ETF (NYSEArca: DIV) certainly is, having joined an array of energy and utilities ETFs in hitting consecutive all-time highs in recent days. [Energy ETFs Trump Broader Market]

DIV allocates almost 44% of its combined weight to the utilities and energy sectors. None of the four largest U.S. dividend ETFs exceed DIV’s combined utilities and energy sector allocations. The one that comes closest, the iShares Select Dividend ETF (NYSEArca: DVY), devotes nearly 35% of its weight to utilities.

DIV’s utilities and energy mix is proving rewarding. Over the past 90 days, the ETF, which sports a trailing 12-month yield of 5.7%, is higher by more than 4%. That tops all four of the largest dividend ETFs.

To be fair, DIV has an advantage over some of its rivals in that all of its energy holdings with the exception of Chevron (NYSE: CVX) are master limited partnerships, a trait that bolsters DIV’s yield while making the ETF a beneficiary of declining Treasury yields. Speaking of falling Treasury yields…