The performance of the Utilities SPDR ETF (XLU) and the Vanguard REIT ETF (VNQ), which are two of the highest-dividend–paying sectors. In 2011, XLU and VNQ gave returns of 19.1% and 6.7%, respectively, compared to the -1.2% of S&P 500. In 2011, we saw a steep dip in interest rates as the Fed bought Treasuries aggressively. The ten-year Treasury (IEF) yield dipped by a whopping 150 basis points in 2011.
The two ETFs gave decent returns in 2012, when interest rates stayed put. 2013 saw a rise in interest rates as the Fed contemplated tapering its bond-buying program, which led to muted returns by the two ETFs. The S&P 500 gained close to 30%. Last year, though, the yield on the ten-year fell by ~80 basis points. XLU gained 30.88%, while VNQ grew by 30.4% in 2014. The S&P 500 gained ~12% in 2014. This year, both XLU and VNQ have given negative returns due to the looming rate hike, while the broader index has been more or less flat. As you can see, these sectors have performed well when interest rates have fallen and have underperformed when rates rise.
Source: Market Realist
Related Articles:
- 10 Dividend Stocks With A 10% Yield In 10 Years
- Are ETFs and CEFs Good Dividend Growth Investments?
- 6 Companies With The Power of 5/15 Dividend Growth
- 9 High Rated, Lower Debt Dividend Stocks With A Reasonable Payout
- Searching the World For The Best Dividend Stocks
Why Dividend Stocks Have Underperformed This Year
Posted by D4L | Thursday, July 30, 2015 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
Dividends and diversification -- those two things can help you achieve a comfortable retirement when combined with the income you will recei...
-
The best dividend stocks have one thing in common: resiliency. They can continue increasing their dividends even in the harshest economic en...
-
Investors wanting to enjoy steady and consistent income should consider dividend aristocrats. In fact, even in these chaotic times, dividend...
-
When looking for dividend stocks to invest in, it is advisable to choose companies that have strong dividend histories and stable balance sh...
-
A good dividend stock has more than a high yield. Dividends need to be supported by cash flow, and cash flow depends on the long-term streng...
-
When hunting for discounted investments, one excellent starting point is to look for businesses with dividend yields trading above their fiv...
-
Higher dividend yields often imply that the underlying company paying the dividend has a higher risk profile. However, that's not always...
-
It's hard to beat a sustainable, high-yield dividend paired with a beaten-down valuation. The best dividend stocks offer high yields and...
-
Strange but true: seniors fear death less than running out of money in retirement. And unfortunately, even retirees who have built a nest eg...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.