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Dividend ETFs in Spotlight As Stocks Continue Whipsawing

Ryan McQueeney

Major stock indexes have set multiple records this week, with Monday’s selloff marking the worst Christmas Eve in market history—only to be met by the Dow’s largest point gain ever on Wednesday. Stocks pulled back from there on Thursday morning, causing some to wonder whether the post-Christmas trend has been defined just yet.

With this in mind, Associate Stock Strategist Ryan McQueeney puts two ETFs in the spotlight: the iShares Global 100 ETF IOO and the iShares Select Dividend ETF DVY. Ryan has a position in IOO in the Zacks Income Investor portfolio, while DVY always sticks out as a popular fund among income-focused investors.

A glance at the charts for these two ETFs reveals no miraculous answer to whether stocks have found a bottom just yet.

Take IOO—a fund with international exposure, for example. The ETF has mirrored the pattern of broader indexes, and it managed to rally quite well on Wednesday. But foreign markets didn’t pick up where U.S. investors left off, and considering the low-volume nature of the fund itself, the strength of the rebound remains unclear.

DVY, on the other hand, traded hands much more frequently this week. While some might have guessed that the Christmas holiday would result in lower-than-average volume on Monday and Wednesday, the fund actually saw much higher volume on those days. The selloff was marked by strong volume, and so too was the rally.

So what does that tell us, exactly? And why might it be important to look at the importance of “safer” investments like ETFs yielding 2.6% and 3.6%, respectively? Ryan explores these questions, and more, in today’s ZRB video.

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