The past week in terms of net inflow/outflow activity in ETFs has been marked mostly with heavier redemption activity from broad based ETFs including SPDR S&P 500 (SPY) , iShares Russell 2000 (IWM) and PowerShares QQQ (QQQ) . Collectively, the three funds have seen about $7 billion leave the funds in the past week or so.
We have seen lighter creation activity across the ETF landscape in terms of absolute dollars in general in the past week or so, but one ETF stands out, iShares Dow Jones Select Dividend (NYSEArca: DVY) as far as reeling in assets. DVY has attracted more than $150 million in recent sessions, as the ETF has rallied nicely off of its lows in the high $55 range.
The ETF tracks the Dow Jones Select Dividend Index, which was formed by screening equities by metrics including dividend per share growth rate, dividend payout percentage rate, and finally average daily dollar trading volume. Finally, stocks are chosen for inclusion in the ETF based on their dividend yield, and top holdings currently are LO (3.72%), LMT (2.75%), KMB (2.03%), CTL (2.01%), and CVX (1.96%).
Generally, the ETF has a slant towards sectors including Utilities (31.37%), Consumer Staples (16.23%), and Industrials (14.04%) and is decidedly tilted towards mega cap, large cap and mid cap names (with 87% of the portfolio residing there).
Year to date, DVY has trailed the S&P 500 Index, up 6.29% versus the S&P rallying 8.91% during the same time period. However, in the trailing one year period, DVY is up 9.97% versus the S&P 500 Index up 4.66%, and in volatile markets, one can see the appeal of equities that are historically yielding more than the benchmark index.
For, iShares S&P 500 (IVV) is currently only yielding 1.95% and DVY has a substantially higher yield of 3.43% (and iShares Barclays 20+ Year Treasury Bond (TLT) is yielding 2.74%), so it seems that investors are comfortable with “less potential upside than the benchmark equity index with current income” in today’s environment.
iShares Dow Jones Select Dividend
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