Dividend, value, and low volatility strategies outperformed in the first half of the year, demonstrating a continuing emphasis on defense.
The ALPS Sector Dividend Dogs ETF (SDOG) has been ALPS’ most popular ETF by net inflows for the last few months. SDOG, which has $1.2 billion in assets under management, has seen $80 million in inflows year to date, according to VettaFi.
Throughout this year’s market turmoil, dividend strategies have been among the most reliable sources of relative, if not absolute, performance, according to Craig Lazzara, managing director, core product management, S&P Dow Jones Indices.
“Advisors are increasingly turning to high-dividend yielding ETFs given the rising interest rate environment’s negative impact on bond positions, but many of these funds are heavily weighted in a handful of sectors, SDOG’s sector neutral approach stands out for providing greater diversification,” said Todd Rosenbluth, head of research at VettaFi.
SDOG offers exposure to a strategy that is largely similar to the “Dogs of the Dow” approach, which involves a portfolio consisting of the 10 components of the Dow Jones Industrial Average with the highest dividend yields. SDOG, however, casts a much wider net by drawing from the S&P 500 as its universe of potential stocks.
The fund maintains equal allocations to each of 10 sectors, unlike many dividend-focused products. The portfolio also consists of equal weighting to each component stock, according to VettaFi.
Other dividend ETFs to consider include the SmartETFs Dividend Builder ETF (DIVS), the WisdomTree US High Dividend Fund (DHS), and the T. Rowe Price Equity Income ETF (TEQI).
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