Dividend funds seek to deliver regular cash flows based on pay-out histories of companies selected for inclusion
While the funds may secure dividend pay-outs, the equity valuation of their investments is actually diminished by the collected dividends
Only the quality implied by the ability to pay dividends stands for the potential to recover equity value over time
Diversification by style - value, quality or 'leadership' - will be a key driver, setting some of the funds apart and requiring careful personal evaluation of fund profiles before investing
As part of the line-up of most fund providers, US market dividend ETFs feature distinct investment models
- ‘core’ securities, by market cap
- ‘quality’ based on regularity and growth of dividend pay-outs over the time,
Because US investors may give priority to the domestic equity markets, funds invested in the non-US developed markets or in emerging markets are not well represented in this core selection
The High Dividend Yield Funds, a companion selection to this theme which includes non-US fund selections, may be of interest as part of a diversified portfolio
Performance and volatility computation of recently launched funds will be skewed for lack of full data history
To take a closer look, momentum signals trends of the last 5 days against a 20-day average
For comparison, select various time frames in the top right menu box, from 2 weeks to a full year (performance of some very recently listed ETFs may not be significant for lack of price data)