Dividend Stocks Lag

Posted by D4L | Monday, March 12, 2012 | | 0 comments »

The Dividend Stars portfolio rose 2.85% in February on a total return basis, underperforming the benchmark S&P 500 Index over the same period by 0.53 percentage point. Since being launched Nov. 10, the Dividend Stars portfolio has returned 9.82% versus 10.94% for the S&P 500, a lag of 112 basis points. So far in 2012, the portfolio is trailing the S&P 500 by 2.1 percentage points. The current portfolio offers an average dividend yield of 2.71% versus 2.0% for the S&P 500.

Since the start of 2012, investors have turned away from defensive sectors and dividend-paying stocks, and have assumed more risk. According to Merrill Lynch research, low-quality stocks (those with a C&D quality ranking) have returned 20.4% this year, while stocks with a higher-quality rating (A or A+) have returned only 5.7%.

Source: The Street

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