ETF Spotlight on the ALPS Sector Dividend Dogs ETF (NYSEArca: SDOG), part of an ongoing series.
Assets: $831.6 million
Objective: The ALPS Sector Dividend Dogs ETF tries to reflect the performance of the S-Network Sector Dividend Dogs Index, which applies the “Dogs of the Dow Theory” on a sector-by-sector basis using the S&P 500 with a focus on high dividend exposure.
Holdings: Top holdings include Du Pont (NYSE: DD) 2.2%, Darden Restaurants (NYSE: DRI) 2.2%, Altria Group (NYSE: MO) 2.1%, Paychex (NYSE: PAYX) 2.1% and Exelon (NYSE: EXC) 2.0%.
What You Should Know:
- ALPS Funds sponsors the ETF.
- SDOG has a 0.40% expense ratio.
- The ETF has 50 holdings and the top ten make up 22.4% of the overall portfolio.
- Sector allocations include basic materials 10.2%, consumer discretionary 5.7%, financials 9.8%, telecom 12.7%, energy 10.2%, industrials 12.1%, tech 10.1%, consumer defensive 9.6%, healthcare 10.0% and utilities 9.6%.
- Market capitalization weights include mega-caps 25.5%, large-caps 36.6% and mid-caps 37.9%.
- The fund’s portfolio also shows a 18.4 price-to-earnings ratio and a 2.1 price-to-book.
- SDOG has a 3.21% trailing 12-month yield.
- The fund is up 0.2% over the past month, up 2% over past three months and up 12.6% year-to-date.
- The ETF focuses on high-dividend exposure across all 10 sectors of the S&P 500, selecting the five highest yielding securities in each sector and equally weighting the holdings.
- Holdings are rebalanced quarterly in an effort to keep sector weights in the area of 10% and individual holdings at 2%.
- The Dogs of the Dow strategy is based on buying the 10 Dow Jones Industrial Average stocks with the highest dividends at the start of every year.
- By picking the highest yielding stocks, the fund aims to provide potential price appreciation as market forces bring yields back to in line with the performance of the overall market.
Next page: The latest news
The Latest News:
- On Thursday, the S&P 500 and the broad equities markets experienced their largest decline in two months.
- Traders are growing wary about how quickly U.S. interest rates will rise, along with the potential negative effects it will have on stocks in the months ahead, Reuters reports.
- Looking ahead, volatility is likely to increase as investors wait for the Federal Reserve to normalize its monetary policy.
- “Given the length and magnitude of the current accommodation, there’s a chance we’ll react more negatively when the Fed hikes rates than the market has in the past,” Leo Grohowski, chief investment officer at BNY Mellon Wealth Management, said in the article.
ALPS Sector Dividend Dogs ETF
For past stories in this series, visit our ETF Spotlight category.
Max Chen contributed to this article.