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    HOME Market Snapshot ETFQuest 101 ETF SELECTOR LOGIN
    02/18/2009Back to All News List
    Time to invest in dividend ETF (VIG, DVY, SDY)?

    Dow and S&P are near their November 2008 lows. If youare comfortable with downside risk at this point and like to rebuild your portfolio allocating some funds to Vanguard Dividend ETF (VIG) may not be a bad idea. Dividend yield is about3.04%. It's daily trading volume is about 180,000. Funds top ten are big large caps in energy, telco, retail, healthcare and finance. The financial exposure is less than 10% as below (from yahoo finance)

    Technically VIG's relative price performance is near top quartile and is 8% below its 50 day moving average.

    The other dividend ETF like Claymore/Zacks Yield Hog ETF (CVY) is illiquid, poor relative strength (35) and one year return -50%. The stock selection spans from small cap to large cap.

    The SPDR S&P Dividend (SDY) comprises of US big caps, has a volume of 250,000 and relative strength of 79 but has about 22% financial exposures. Industrial material allocation is about 23%. Although current yield is 6.9%, dividend cuts are happening from Gannet, PFE, GE and others.

    The iShares Dow Jones Select Dividend Index (DVY) has trading volume of 600,000 and relative strength of 70 but has 38% in financials.

    There are international, high yield and mid cap, small cap ETFs. But VIG is a better choice considering lowest expense ratio (0.28%) compared to DVY (0.40%) and SDY (0.35%), well known big cap stocks and low financial exposures. The current dividend yield is about 3.04% and may trend down a bit as companies like GE lowers its dividend.

    Disclosures: Holding VIG.



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