Dividend Fund up 30% in 2013

Through November, nearly $210 billion has flowed into exchange traded products around the world and nearly a third of that total has been allocated to precision-driven, or smart beta, strategies.

Dividend ETFs are capturing a significant of the flows to non-cap weighted ETFs. “Dividend weighted- funds once again led Strategic Beta with $27.6 billion of flows this year, more than double the $13.1billion collected in 2012. Many income-seeking investors have turned to dividend stocks as bond alternatives in a persistent low-interest rate environment,” noted BlackRock earlier this week.

Although plenty of new dividend ETFs have popped up this year, some of which have already made inroads with income investors, those investors have also remained fond of the largest and cheapest  dividend products. However, bigger and cheaper does not always equal better and dividend ETFs prove as much.

The ALPS Sector Dividend Dogs ETF (NYSE: SDOG) is up 31.4% in 2013. SDOG basically applies the “Dogs of the Dow” theory to S&P sectors, buying five highest-yielding stocks in each of the S&P 500 index’s 10 sectors. SDOG caps sector weights at 10% and individual holdings weights at 2%. The trailing 12-month yield on SDOG’s underlying index is 4.22%, according to issuer data.

Source:  Tom Lydon, ETF Trends

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ALPS Sector Dividend Dogs (SDOG) is a component of the D2 Capital Management Multi-Asset Income Portfolio. 

Disclosure:  I own the D2 Capital Management Multi-Asset Income Portfolio

The views expressed here are that of myself or the cited individual or firm and do not constitute a recommendation, solicitation, or offer by myself, D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

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