Sun Shines on Dividend Funds Again

By Todd Shriber, ETF Trends

On Thursday, 51 U.S.-listed exchange traded products hit new all-time highs. Highlighting investors’ thirst for income, preparation efforts for a possible case of the summer doldrums or both, nearly a quarter of the ETFs making new highs yesterday were dividend ETFs.

And that does not include the multitude of MLP and utilities funds that also hit new highs. Investors have also been putting new cash to work with dividend ETFs after pulling money from some payout funds in the first quarter.

The ALPS Sector Dividend Dogs ETF (SDOG) made a new high Thursday and since the start of April, the fund has pulled in over $56 million in new assets. Year-to-date, SDOG is up almost 6%. SDOG surged 34.2% last year.

The ETF 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%. A 10% weight to utilities is more than triple the weight the sector commands in the S&P 500 and that has been a boon for SDOG in a year when utilities have shined. The ETF has a 30-day SEC yield of 3.56%.

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ALPS Sector Dividend Dogs ETF (SDOG) is a component of the dividend oriented D2 Capital Management Multi-Asset Income Portfolio.  The current yield on the portfolio is 5.29% (as of 8 May 2014).

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.

 The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville.  The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.