Although S&P 500 dividend growth will slow this year, it is accurate to say the current bull market has been kind to dividend investors. Many trusted dividend payers have extended lengthy streaks, some in the order of multiple decades, of boosting payouts while other companies have become new dividend payers and growers.
Scores of dividend exchange-traded funds have been born during the current bull market, but some well-known dividend ETFs are older than that. For example, the WisdomTree High Dividend Fund (NYSE: DHS) will turn 10, along with several other WisdomTree dividend ETFs, next month. And what a decade it has been for the $1 billion DHS.
DHS's underlying index, the WisdomTree High Dividend Index (WTHYE) “is dividend weighted annually to reflect the proportionate share of the aggregate cash dividends each component company is projected to pay in the coming year, based on the most recently declared dividend per share,” according to WisdomTree.
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What Sets DHS Apart
Unlike rival dividend ETFs, DHS is not reliant on dividend increase streaks as a stock selection tool. That said, investors will be assured to know that many of the over 400 companies found in DHS are dividend aristocrats. For example, top 10 holdings Procter & Gamble Co (NYSE: PG) and The Coca-Cola Co (NYSE: KO) have two of the longest dividend increase streaks among all S&P 500 companies.
DHS is a defensive ETF that marries two favored income themes: low volatility and dividend yield. The ETF's underlying index yields just over 4 percent with annualized volatility of under 18 percent, according to issuer data.
In a note out Tuesday, WisdomTree pointed out that since inception, DHS has topped 77 percent of rival funds. Over the past five years, that number jumps to 99 percent.
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“For the five years ended March 31, 2016, every single WisdomTree Fund we show beat more than 90 percent of its respective peer group. DHS, DON and DES all beat 99 percent of their respective categories over this time frame,” said WisdomTree.
DHS's returns during the current bull market are staggering as well. This bull market started on March 10, 2009, and since then, DHS is up nearly 212 percent. When accounting for reinvested dividends, the ETF's bull market performance is even more jaw dropping with a gain of nearly 308 percent since March 10, 2009. By comparison, the largest U.S. dividend ETF has returned “just” 197 percent over that period even factoring in reinvested dividends.
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