 |
Vanguard ETF: |  |
7.4%* |
|
Diversified Core: | |
8.1%* |
|
Six Core Asset ETFs: | |
7.3%* |
Articles on DVY
- Retirement Income ETFs vs. Income Mutual Funds: An Update
09/11/2011
We first compared asset allocation portfolios using dividend ETFs (and bond ETFs) and those using income mutual funds on SeekingAlpha.com Retirement Income Investing: ETFs vs. Mutual Funds more than two months ago. Let's review these two plans: Retirement Income ETFs and Schwab Income Mutual Fund Select List.
Here are the asset classes covered by the two plans:
The list of minor asset classes covered by Retirement Income ETFs The list of minor asset classes covered by Schwab Income Mutual Fund Select List Diversified Emerging Mkts: EEM, VWO, DEM
Emerging Markets Bond: EMB, PCY
Equity Energy: AMJ
Foreign Large Value: PID, IDV
Global Real Estate: RWX
High Yield Bond: HYG
Inflation-protected Bond: TIP
Intermediate Government: IEI
Intermediate-term Bond: CIU, CORP, MBB
Large Blend: VIG
Large Value: DVY, SDY, VYM, FVD
Long Government: IEF, TLT
Long-term Bond: LQD, VCLT
Mid-cap Value: PEY
Miscellaneous Sector: PFF
Muni National Long: MUB
Muni Short: SHM
Real Estate: IYR, ICF, VNQ
Short Government: SHY
Short-term Bond: CSJ, VCSH
World Bond: BWX, WIPEmerging Markets Bond: TGINX
Foreign Large Blend: SICNX, LISOX
Foreign Large Value: AAIPX
High Yield Bond: STHTX, MWHYX
Inflation-protected Bond: ACITX
Intermediate Government: SWGSX, CPTNX
Intermediate-term Bond: SWIIX, SAMFX, PTTDX, PGBOX, MWTRX, FTRFX
Large Blend: SWANX, TICRX, PRBLX
Large Growth: SWLSX, JENSX
Large Value: TWEIX, PQIAX
Mid-cap Blend: NMMCX
Mid-cap Value: ARDEX
Multisector Bond: PONDX
Muni National Interm: SWNTX, TWTIX, STTBX
Muni National Long: NOTEX, ACLVX
Muni Short: FSHIX
Real Estate: CSRSX
Short Government: FIGTX
Short-term Bond: FSTIX, ACSNX
Ultrashort Bond: SIGVX
World Bond: PFODXAsset Class Retirement Income ETFs Schwab Income Mutual Fund Select List REITs 4 1 Fixed Income 19 24 Sector Fund 2 0 Foreign Equity 2 3 Emerging Market Equity 3 0 US Equity 6 9 Other 0 0 Total 36 37 Little in the two plans' investment choice ratings has changed since then. As of Sep 9, 2011, Retirement Income ETFs investment choice is rated as average and Schwab Income Mutual Fund Select List investment choice is rated as above average based on MyPlanIQ Plan Rating methodology that was designed to measure how effective a plan's available investment funds are . It has the following detailed ratings:
Attribute Retirement Income ETFs Schwab Income Mutual Fund Select List Diversification great (95%) great (85%) Fund Quality below average (29%) great (85%) Portfolio Building above average (67%) above average (71%) Overall Rating average (64%) above average (80%)
Performance chart (as of Sep 9, 2011)Performance table (as of Sep 9, 2011)
Portfolio Name 2011 YTD 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe Retirement Income ETFs Tactical Asset Allocation Moderate 2.49% 8% 80% 11% 84% 10% 71% Retirement Income ETFs Strategic Asset Allocation Moderate -1.16% 5% 42% 5% 23% 3% 14% Schwab Income Mutual Fund Select List Tactical Asset Allocation Moderate 3% 9% 84% 11% 101% 10% 92% Schwab Income Mutual Fund Select List Strategic Asset Allocation Moderate -2.11% 4% 35% 4% 27% 3% 16% Refer to detailed portfolio comparison.
Again, we are seeing income ETFs can still rival the well selected income mutual funds. This is a good news for income investors in their IRA investments or taxable account investments. ETFs have more flexibility and have a well defined and simple indexing strategy (isn't this what MyPlanIQ is also doing?).
Disclosure:MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
Symbols: SPX, VIG, DVY, SDY, ICF, RWX, HYG, LQD, IEF, TLT, TIP, AMJ, TWEIX, LISOX, CSRSX, PTTDX, Retirement Investments, IRAs, ETF Portfolios, Portfolio Management, Risk Management, Dividend ETFs
- Portfolio Management: Best of Fixed Income Managers vs. Retirement Income ETFs
09/08/2011
Two defensive investment strategies useful in current stressful times are compared. The first is based on selecting the best bond fund every month or every quarter from a list of bond funds managed by Morningstar's 'Manager of the Year' P Bond Funds Momentum Based on Upgrading Fixed Income Managers of the Year`s Funds Monthly. These funds include PTTRX, TGLMX, WATFX, MWTRX, LSBDX, DODIX, FPNIX.
The second is Retirement Income ETFs that consists of a list of candidate dividend stock and bond ETFs including DVY, EMB, HYG, ICF, IDV, TIP, VIG, VWO.
The conclusion: the Fixed Income Managers of the Year is solid and has lower volatility, a good defensive strategy one should consider. Both of them are better alternatives than a broad based index such as S&P 500 (SPX) or total bond market index (AGG)
Read more from our SeekingAlpha's article:
Defensive Strategies In Stressful Times: The Best Of Fixed Income
Symbols: SPX, DVY, EMB, HYG, ICF, IDV, TIP, VIG, VWO, PTTRX, TGLMX, WATFX, MWTRX, LSBDX, DODIX, FPNIX, Retirement Investing, Dividend Stock, Retirement Income, Portfolio Management
- Dividend Payout Reflects the New Reality
08/02/2011
With many energy and high tech stocks paying more and more dividends, the landscape of dividend payout percentages in S&P 500 has changed. In a recent article titled as Burned Before, Dividend Funds Diversify Beyond Same Old Sectors, author Sarah Morgan reported that many dividend stock funds have diversified their investment beyond financial sector concentration to other new sectors.
The following chart from the article shows the change:
It is interesting to see that now, consumer staple stocks (XLP) is the largest sector for dividend payout. With Energy (XLE) and technology (XLK) being very close to the second largest financial sector (XLY), investors are now more in favor of these two sectors.
This change bodes well to our long standing argument that
- technology companies, being one of the main beneficiaries of globalization, have better balance sheets and are now more shareholder friendly.
- resource (energy) companies will do well in the era of depleted natural and energy resources.
Dividend investors should also focus on dividend appreciation (rising dividend) instead of merely current dividend amounts (dividend hogs). The rising dividend approach will allow you to find more energy and technology companies. In fact, it will allow you to even consider those gold mining stocks (such as Newmont (NEM)) that have increased their dividends steadily recently. As gold price continues to rise, these stocks or ETFs (such as market vector gold mining stock GDX) might be worth a look.
See Retirement Income ETFs plan for portfolios using dividend and interest paying ETFs such as DVY, VIG, VYM.
Symbols: XLK, XLE, XLY, GDX, SPX, COMP, VIG, DVY, Dividend Investing, Retirement Investing
- Dividend Stock ETF Investing: Growth vs. Value
05/24/2011
Dividends have been long considered to be an important metric to value a company. In essence, dividends are the cash payment out of earnings from a company. If a company has a mandate to reward its shareholders with part of its earnings, company management is more responsible for and conscious on their excessive earnings: give back to shareholders or plow them back for future growth. This puts a check on executives to curb their growth at any price or expand company bureaucracy for their own purposes.
Dividend ETFs are favorable investing vehicles in retirement investing. This is especially important for retirees or baby boomers who are relying dividends as part of their income. These ETFs have been used to build lower risk and higher return asset allocation portfolios such asRetirement Income ETFs. Please refer to this article for more details.
Two popular strateggies are employed in dividend stock investing: dividend growth (or appreciation) vs. dividend weighted (or hogs). The former selects and weighs more heavily on stocks that have a record of increasing dividends over time. The latter basically weighs more heavily on stocks that have higher yields (with the exception of filtering out some lower grade stocks). If one views dividends are a stream of earnings that are actually materialized to be delivered to shareholders over time, the dividend growth approach is like growth at a reasonable price while dividend hogs is like value investing.
These two strategies are used for most of dividend stock ETFs. The following is a list of some of these U.S. dividend stock ETFs:
Vanguard Dividend Appreciation (VIG) Growth Vanguard High Dividend Yield Indx (VYM) Hogs First Trust Value Line Dividend Index (FVD) Growth iShares Dow Jones Select Dividend Index (DVY) Hogs PowerShares HighYield Dividend Achievers (PEY) Growth SPDR S&P Dividend (SDY) Hogs The dividend growth strategy puts more weight on high quality companies that have increased their dividends over time. The high dividends are not the primary focus. Companies that increase dividend payout over time in general should have better cash flow and higher confidence in their future earnings. They are also more shareholder friendly. Such strategy has been long adopted in investment communities. Some of the best investment newsletters such as Valueline and Investment Quality Trends have had model portfolios employing this approach for more than 30 years.
The high dividend (or so called 'dividend hog') strategy, on the other hand, might run into dangers of investing in companies that merely try to maintain high dividends to appeal to investors.
The following table & chart show the performance of the above ETFs:
Portfolio Performance Comparison
Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe PEY 19% 105% -2% -9% -4% -18% FVD 27% 147% 4% 18% 8% 29% DVY 28% 208% 1% 3% 0% -3% VIG 25% 143% 5% 18% 5% 16% VYM 28% 152% 3% 6% From the above, it is clear that dividend growth ETFs outperformed dividend hog ETFs. Part of the reason is that during the 2008-2009 financial crisis, high dividend financial companies such as banks and mortgage companies were severely damaged.Disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.Symbols: VIG, VYM, SDY, FVD, DVY, PEY
- Foreign Large Cap Equities Deliver Strong Returns Among Dividend Stock ETFs
05/04/2011
Foreign Large Cap Equity ETFs allow investors to diversify their portfolios by gaining exposure large stocks in developed economies across the globe. These ETFs track equities from nations like Japan, the UK, and Germany, among many others. These ETFs invest primarily in stocks with market caps in the top 70% of their respective markets.
Among Dividend Stock ETFs (see table), those that track Foreign Large Cap Equities performed very well in the past week, continuing their string performance over the past 52 weeks.. The iShares Dow Jones International Select Dividend ETF (IDV) returned 2.81% in the past week and over 28% in the past 52 weeks. Also performing well among Dividend Stock ETFs was the iShares MSCI EAFE Index ETF (EFA), which gained 2.69% in the last week and almost 18% during the past year.
Top Dividend Stock ETF Trends
4/29/2011
ETF Name Symbol 1 Week 4 Weeks SPDR DJ Wilshire Intl Real Estate RWX 2.98% 5.22% iShares Dow Jones Intl Select Div Idx IDV 2.81% 6.02% iShares MSCI EAFE Index EFA 2.69% 4.90% iShares Dow Jones US Real Estate IYR 2.62% 4.78% First Trust Value Line Dividend Index FVD 1.93% 3.15% SPDR S&P 500 SPY 1.93% 2.18% iShares Dow Jones Select Dividend Index DVY 1.89% 2.32% Vanguard High Dividend Yield Indx VYM 1.84% 3.27% PowerShares Intl Dividend Achievers PID 1.81% 4.28% PowerShares HighYield Dividend Achievers PEY 1.73% 1.78% The growth of these ETFs has followed an upward trend in the overall equity market in recent periods. As a higher percentage of the world's equity market capitalization continues to shift away from the United States, Foreign Large Cap Equities will continue to bring strong returns to investors.
Foreign Large Cap Equities
04/29/2011Description Symbol 1 Yr 3 Yr 5 Yr Avg. Volume(K) 1 Yr Sharpe iShares MSCI EAFE Index EFA 16.26% -3.93% 0.58% 17,665 68.32% Vanguard MSCI EAFE ETF VEA 21.49% -0.87% NA 2,135 88.16% Schwab International Equity SCHF 19.65% NA NA 180 86.62% iShares Dow Jones Intl Select IDV 26.81% 1.73% NA 156 107.04% iShares MSCI EAFE Value Index EFV 14.36% -4.8% -1.08% 133 55.66% PowerShares Intl Dividend Achievers PID 20.98% -1.56% 2.87% 121 112.83% iShares MSCI EAFE Growth Index EFG 19.53% -2.71% 1.55% 84 86.67% PowerShares DWA Dev Mkts Techn PIZ 22.65% -0.49% NA 115 93.38% In addition to the ETFs mentioned above, others in the Foreign Large Cap sector have shown strong growth in recent periods. The PowerShares DWA Developed Markets Technical ETF has returned 22.65% in the past year and the Vanguard MSCI EAFE ETF (VEA) gained 21.49% during the same period. These strong gains have helped to offset the large valuation declines experience during the recent financial crisis.
While high equity valuations may trigger a market retraction in coming periods, Foreign Large Cap Equity ETFs should remain a substantial part of any well-diversified portfolio.
Symbols: EFA, VEA, SCHF, IDV, EFV, PID, EFG, PIZ, RWX, IDV, EFA, IYR, FVD, SPY, DVY, VYM, PEY
Disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
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03/30/2011
- Dividend Stock ETFs Somewhat Defensive But Not Enough to Withstand Market Stress
03/17/2011
- Riding High with Global Economy, International REITs Offer Currency and Inflation Hedge
03/10/2011
- Dividend ETFs: Public REITs Offer Good Value While Economy Recovers
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- Dividend Stock ETFs All Dropped, But Showing Defensive
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- Initiating Tracking of US Subclasses
02/22/2011
- RSP Leads US Large Cap Blend Equities
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- End of the Year Review of Luminary Portfolios -- II
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- Yield Quest Turns from Bonds to High Yield Stocks
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- ETF's for Income Nov 29
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- Retirement Income Portfolio Building Using ETFs and Asset Allocation Strategies
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