Dividend ETFs That Outpace the S&P

By MoneyShow.com  JUN 05, 2013 10:48 AM

Rarely do dividend-seeking investors find investments that offer significant yields plus handsome appreciation. But this year, opportunities abound.

 


Dividend investors typically give up on fast growth in favor of steady income. However, some dividend exchange traded funds have been outpacing the broader S&P 500 (INDEXSP:.INX) so far this year.

Of the almost 50 dividend-focused ETFs on the market, 18 are outperforming the S&P 500, reports Juan Carols Arancibia for Investor's Business Daily. Top outperforming dividend-yield weighted ETFs include:

Indices that follow a dividend yield-weighted methodology generate more income, but the funds lean toward more distressed, high-yield, and small-cap firms than other types of broad equity ETFs. Top outperforming dividend-weighted ETFs include:

ETF indices weighted by total dividends paid would lean toward large-caps, since larger stocks would dish out the most overall dividends. Additionally, the large-cap tilt provides lower volatility in times of market distress.

Additionally, the actively managed ALPS Sector Dividend Dogs (NYSEARCA:SDOG) has also been outpacing the broader markets. SDOG selects stocks from the S&P 500 that have the highest dividend yield in their respective sectors. The well-known "Dogs of the Dow" theory is applied to S&P sectors. The active ETF has a 0.40% expense ratio, a 3.97% 30-day SEC yield, and it is up 22% year-to-date.


Editor's Note: This article was written by Tom Lydon of ETF Trends.

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