Interest in dividend-paying stocks has surged over the past several years with this asset sub-class emerging as a popular choice for those looking to bolster income and smooth overall volatility. Given the current environment, it shouldn’t be surprising that there has also been a surge in the number of dividend-focused ETFs; there are more than 50 exchange-traded products that target dividend-paying stocks in one way or another, whether by replicating a dividend-weighted index, including only the most consistent of dividend payers, or using other screening criteria.
The yields on dividend ETFs, however, are all over the board; some deliver payouts that are roughly in line with broad equity markets, while others collect higher yielding stocks with the goal of delivering a more substantial current return potential. Neither of these objectives is necessarily superior to the other. Focusing on consistent dividend payers will generally lower overall volatility, and will potentially narrow in on stocks positioned to deliver stellar long-term returns. [click to continue…]
For the past several years, interest rates in the U.S. and in many developed countries around the world have been hovering at record lows as central banks have attempted to spur economic growth by reducing borrowing costs. And all indications are that the low interest rate environment is here to stay–at least for another few [...]
The proliferation of U.S.-listed ETFs in recent years has simplified the asset allocation process for investors, making it easier than ever to execute various types of strategies in a cost-efficient and low-maintenance manner. Investors interested in focusing their equity exposure around stocks that exhibit low pricing multiples and attractive dividend yields, for example, have no [...]