Dividend payers = Higher returns

Despite the recent correction, the broad equities market could still move higher. Nevertheless, investors who are wary of any potential volatility along the road could consider exchange traded funds that focus on consistent dividend payers, say S&P analysts.

“While we believe equities should move higher in the next twelve months, the journey will likely be a volatile one,” Todd Rosenbluth, S&P Capital IQ Director of ETF and Mutual Fund Research, wrote in a research note. “With that in mind, we think investors might find investment strategies focused on consistent dividend-paying stocks appealing. Not only can they help protect against downside in a market pullback, they can also aid returns during a subsequent potential market rally.”

Over the long-term, consistent dividend payers have contributed to higher returns. Specifically, over 40% of total return in the S&P 500 since 1926 has come from reinvested dividends.

Source:  Tom Lyden, ETF Trends

Allianz NFJ Dividend Value (PEIDX) is a component of many of our  mutual fund portfolios.  Trailing 12 month yield is 2.11% and 30 day SEC yield is 3.40%.

The information contained in this article does not constitute a recommendation, solicitation, or offer by 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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