As investors reach the halfway mark of 2021, it’s clear that some dividend strategies have performed than others.
So far in 2021, the best-performing non-leveraged dividend ETFs were the Cambria Shareholder Yield ETF (SYLD ), which increased 43.24%; the VanEck Vectors Energy Income ETF (EINC), which rose 38.50%; and the Invesco KBW High Dividend Yield Financial ETF (KBWD ), which is up 29.08%.
These three ETFs have each employed unique strategies that have performed well, despite a volatile year.
SYLD: Harnessing Share Repurchases
SYLD is an active equity fund that uses a unique quantitative approach to build income. The ETF tracks 100 U.S. large caps with the best combined rank of dividend payments and net stock buybacks, while also screening for value and quality factors.
SYLD looks beyond just stocks that have consistent cash payouts; the issuer, Cambria, also weighs share repurchases and net debt paydown as well.
That’s because strong dividends are typically a sign of a strong company, but they don’t always paint a full picture. Share repurchases have the potential to rack in more profit than cash dividends alone. They also have the added perk of speaking to the health of the company and the trust of the shareholders who already have a stake in it.
SYLD’s dividend yield is currently 1.42%.
Accessing Energy Income with 'EINC'
Meanwhile, EINC tracks energy infrastructure stocks via the MVIS® North America Energy Infrastructure Index.
The benchmark offers exposure to midstream North American midstream energy companies, with top holdings in Enbridge Inc (ENB) at 8.32% and TC Energy Corporation (TRP) at 7.87%.
Enbridge is notable for recently becoming the first company in the midstream sector to raise sustainable bonds in North America.
Meanwhile, TC Energy took a hit earlier this year when the Keystone Pipeline project was canceled, but it has a large portfolio and a number of initiatives in place, so the stock has recovered quite soundly.
EINC currently has a dividend yield of 4.41%.
High Dividend Financials with KBWD
Finally, Invesco’s KBWD offers a slice of big dividend-paying financial companies.
It tracks the KBW Nasdaq Financial Sector Dividend Yield Index, which holds U.S. financial companies with competitive dividend yields, as decided by the index provider, Keefe Bruyette & Woods, Inc.
The companies inside KBWD tend toward the riskier side, but if a portfolio has room for some risk, the ETF can give it a shot in the arm.
KBWD’s dividend yield is currently 6.80%, the third-highest in its class.
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