On the lookout for a strategy to pair with the growth-heavy S&P 500? The index has presented some strong returns for investors YTD, yes. Over the last month, however, it has stumbled somewhat. Rate cuts are on the horizon, yes, but should they already be priced in, the market as a whole may not bounce as much as expected. Overall, investors may be wanting a different exposure to pair with the S&P 500, with one ETF in particular a standout candidate for that role.
See more: Biotech ETF SBIO Rides Strong Momentum Into Rate Cuts
That strategy, the ALPS Sector Dividend Dogs ETF (SDOG ) combines a few intriguing factors to put together its investing approach. SDOG modifies the so-called “Dogs of the Dow” approach. The fund draws from the S&P 500 to craft its honed portfolio, maintaining ten equally-weighted sectors. Not only does that set the fund apart from other dividend-heavy funds that lean overmuch into utilities and finance, but also helps SDOG limit overweights towards areas like tech which are already heavily represented.
SDOG's Position Relative to the S&P 500
The strategy, which charges 36 basis points (bps), has returned 10.5% over the last one year per SS&C ALPS Advisors data. On a cumulative basis, the strategy has returned 9.2% over the last three months. That stands above the S&P 500 Total Return index.
A dividend-focused approach offers other benefits, too. Dividends do more than just offer current income, although that’s a powerful asset to have. Dividends also help indicate which firms are seeing healthy outlooks for themselves. Per data from SS&C ALPS Advisors, SDOG saw a 4.17% twelve month trailing dividend yield as of June. Its combination of yield and information can help it stand out from the crowd.
With more than $1 billion in AUM, SDOG presents a picture of a healthy ETF with which to pair a core S&P 500 allocation. For those looking at their options, the fund may be worth keeping an eye on.
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VettaFi LLC (“VettaFi”) is the index provider for SDOG, for which it receives an index licensing fee. However, SDOG Is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of SDOG.
