SPDR S&P Dividend ETF (SDY) offers a portfolio of companies with a long track record of increasing dividends. Companies that consistently increase dividends throughout market cycles tend to have sustainable competitive economic advantages or have experienced strong growth. However, weighting these stocks by yield gives the portfolio a tilt toward lower-quality mid-cap and value companies, which may have greater risk or slower growth in the future.
Since its 2005 inception, the fund has provided roughly the same return and standard deviation as a low-cost S&P 500 index fund on a pretax basis but lagged on a post-tax basis. Because of its tilt toward mid-cap and value stocks, the fund is only suitable for risk-tolerant investors or as a satellite holding as part of a diversified portfolio. In order to limit risk, this fund selects only companies that have increased their dividends for 20 consecutive years. Still, there is no guarantee that they will continue to increase dividends in the future.
Source: Morningstar
Related Articles:
- Are Defense Stocks Good Defensive Stocks?
- International Securities For A Diversified Income Portfolio
- 5 Dividend Stocks That Gave Me A 20%+ Annualized Return
- 6 Rainy Day Dividend Stocks
- When A Stock Fails To Raise Its Dividend: Is It Time To Sell Intel?
Weighting by Yield Can Increase Risk
Posted by D4L | Tuesday, June 02, 2015 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
Popular Posts Last 30 Days
-
In this series, we look through the most recent Dividend Channel ''DividendRank'' report, and then we cherry pick only those...
-
I wanted to find an ideal list of stocks with high dividend yields. The stocks would have to be cheap as well. And the dividends would have ...
-
Owning dividend stocks can be a great way to both generate cash flow and beat the market long term. And if you can find stocks that are over...
-
Long-time readers know I’m a big fan of the insurance industry because of one quirk in their business model. Customers always pay premiums u...
-
“Cheap” stocks aren’t necessarily the best cheap stocks to buy. And dividend stocks, even those with a high payout, aren’t necessarily safe....
-
Investors tend to gravitate to dividend stocks, particularly when those equities increase their payout on an annual basis. When these types ...
-
The markets have been doing very well over the past several weeks, and finding some good bargains has been a bit challenging of late. Howeve...
-
This company's management has raised the quarterly distribution 71 straight quarters, 22 straight years - it will be a Dividend Aristocr...
-
Dividend-paying companies are beacons of profitability. Generally speaking, a company isn't going to share a percentage of its profit or...
-
These dividend stocks tick both boxes: a very high yield and a bullish outlook from the Street. This is pretty crucial as not all dividend s...

0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.