Funds targeting high dividend companies seek to deliver strong regular cash flows based on pay-out records of companies
While the funds may secure high 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
In selecting a fund, the preference for high dividends must be put in context of an investment strategy accounting for a wider range of factors
Supportive of quality with a potential of portfolio diversification, the selection highlights
- sectors such as Finance with Invesco KBW High Dividend Yield Financial ETF
- factors with WBI Power Factor® High Dividend
- regional markets (international, developed or emerging)
The Dividend Yielding ETFs, a companion selection to this theme which is mostly focused on US fund selections, by market cap or by dividend 'quality', 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)