Yield Quest Turns from Bonds to High Yield Stocks
12/16/2010 0 comments
As bond markets continue their turbulence, from Dividend Stock ETF Trend table on MyPlanIQ 360 Degree Market View, one can clearly see that in the last week, U.S. stock ETFs have outperformed S&P 500 (SPY). U.S. REITs (IYR), however, has become a loser during this yield market unrest.
| Description | Symbol | 1 Week | 4 Weeks | 13 Weeks | 26 Weeks | 52 Weeks | Trend Score |
|---|---|---|---|---|---|---|---|
| SPDR S&P Dividend | SDY | 1.51% | 2.71% | 6.1% | 9.59% | 14.52% | 6.89% |
| PowerShares HighYield Dividend Achievers | PEY | 1.15% | 3.66% | 7.45% | 10.19% | 18.96% | 8.28% |
| First Trust Value Line Dividend Index | FVD | 1.14% | 4.08% | 6.82% | 9.78% | 13.1% | 6.98% |
| iShares Dow Jones Select Dividend Index | DVY | 1.1% | 4.19% | 7.2% | 8.99% | 13.67% | 7.03% |
| Vanguard High Dividend Yield Indx | VYM | 1.05% | 4.99% | 9.28% | 11.41% | 12.79% | 7.9% |
| Vanguard Dividend Appreciation | VIG | 1.04% | 4.92% | 9.79% | 11.77% | 13.17% | 8.14% |
| PowerShares Intl Dividend Achievers | PID | 0.79% | 2.41% | 6.21% | 12.87% | 11.4% | 6.73% |
| SPDR S&P 500 | SPY | 0.66% | 4.97% | 10.33% | 11.96% | 13.01% | 8.19% |
| SPDR DJ Wilshire Intl Real Estate | RWX | 0.58% | 3.05% | 6.63% | 22.09% | 17.89% | 10.05% |
| iShares MSCI EAFE Index | EFA | 0.38% | 2.15% | 6.32% | 13.91% | 3.68% | 5.29% |
| iShares Dow Jones Intl Select Div Idx | IDV | 0.18% | 1.59% | 6.08% | 15.48% | 6.93% | 6.05% |
| iShares S&P U.S. Preferred Stock Index | PFF | -0.72% | -1.45% | -1.74% | 7.09% | 16.38% | 3.91% |
| iShares MSCI Emerging Markets Index | EEM | -0.73% | 1.76% | 6.67% | 15.67% | 12.42% | 7.16% |
| iShares Dow Jones US Real Estate | IYR | -1.92% | 1.02% | -0.89% | 3.37% | 20.22% | 4.36% |
This is not surprising as currently, high yield ETFs have similar or greater yields than 10 year treasury yields. For example, SPDR S&P Dividend (SDY)'s one year yield is about 3.33% compared with 10 year treasury rate 3.49%. In fact, Dow Jones Select Dividend Index fund DVY has even higher annual dividend: 3.56%. As stocks are outperforming bonds, high dividend ETFs are logical choices for yield seekers.
From the following trend table, one can see US high dividend ETFs are ranked in the top spots (with an exception of international REITs RWX). The preferred stock ETF, treated as a close cousin of bonds, is pushed to the bottom spot.
| Assets Class | Symbols | 12/15 Trend Score | 12/08 Trend Score | Direction |
|---|---|---|---|---|
| SPDR DJ Wilshire Intl Real Estate | RWX | 10.05% | 11.11% | v |
| PowerShares HighYield Dividend Achievers | PEY | 8.28% | 8.52% | v |
| SPDR S&P 500 | SPY | 8.19% | 9.26% | v |
| Vanguard Dividend Appreciation | VIG | 8.14% | 8.47% | v |
| Vanguard High Dividend Yield Indx | VYM | 7.9% | 8.39% | v |
| iShares MSCI Emerging Markets Index | EEM | 7.16% | 9.71% | v |
| iShares Dow Jones Select Dividend Index | DVY | 7.03% | 7.71% | v |
| First Trust Value Line Dividend Index | FVD | 6.98% | 7.42% | v |
| SPDR S&P Dividend | SDY | 6.89% | 6.7% | ^ |
| PowerShares Intl Dividend Achievers | PID | 6.73% | 8.31% | v |
| iShares Dow Jones Intl Select Div Idx | IDV | 6.05% | 8.36% | v |
| iShares MSCI EAFE Index | EFA | 5.29% | 7.58% | v |
| iShares Dow Jones US Real Estate | IYR | 4.36% | 8.15% | v |
| iShares S&P U.S. Preferred Stock Index | PFF | 3.91% | 5.1% | v |
Looking forward, high quality dividend ETFs are good places to be: with so many companies being cash rich these days, dividends are safer than the coupons from bonds.
labels:investment,
Symbols:IYR,RWX,EEM,PID,IDV,PEY,EFA,SPY,SDY,PFF,DVY,FVD,VYM,VIG,
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