The FOMC meeting concluded yesterday, with members predicting an annual inflation rate of 4.2% by the end of the year. 3.4% was the forecast in June, with 2% being the long-term target. During times of inflation, dividends can act as a hedge .
Dividend ETFs started the year outperforming the S&P 500 during the first five months, only to see sentiment shift back to mega-cap growth and tech. Large-caps have taken the spotlight of late and left most other strategies behind.
Market participants are always searching for the next catalysts for equities. Fortunately, one might be appearing in the form of a beloved, relatively safe concept: dividends.
For income investors, much of the good news this year revolves around robust dividend growth, and that’s applicable to both U.S. and international equities. In fact, payouts are getting close to reclaiming the highs seen prior to the onset of the coronavirus pandemic.
In the lower-for-longer yield for the environment, investors have taken a liking to dividend-producing exchange traded funds. According to Morningstar data, net inflows into dividend-focused ETFs this year ended July 31 were nearly $25 billion, compared to net outflows of $1.8 billion in the year-earlier period, the Wall Street Journal reports.
COVID -19 tanked the global economy, but the recovery continues to be a boon for investors seeking dividends. The recovery has been faster than previous recessions. Typically, it takes anywhere from four to seven years for the economy to reach its pre-recession size.
With dividends perking up around the world, income-starved investors are reminded that there are some compelling payout opportunities in ex-U.S. developed markets. On that note, the ALPS International Sector Dividend Dogs ETF (NYSEArca: IDOG) is ready for some time in the spotlight.
Dividends can provide exceptional inflation protection. This might feel counterintuitive, as generating cash doesn’t seem like a winning strategy when cash is devalued. But there are a few key points to remember: Companies that pay out generous dividends tend to be companies that sell products that are going for market value.
In looking at every investment sector over the past twenty years, real estate jumps out as one of the strongest. Even with the growing sense of uncertainty in markets, real estate is likely to have bouts of surging performance that greatly exceed its downturns.
Over the past several years, investors have grown acquainted with some familiar refrains regarding ex-U.S. developed market equities. Chief among those are that developed market equities are inexpensive relative to their U.S. counterparts, but they frequently lag domestic benchmarks.
ETF Trends CEO Tom Lydon discussed the SmartETFs Dividend Builder ETF (DIVS) on this week’s “ETF of the Week” podcast with Chuck Jaffe on the MoneyLife Show. This ETF offers exposure to small cap U.S. stocks that maintain attractive dividend yields, making it one of many tools available to investors looking to enhance the current returns delivered from the equity side of their portfolios.
The Vanguard Dividend Appreciation ETF (NYSEArca: VIG) and the Vanguard High Dividend Yield ETF (NYSEArca: VYM) are two of the largest dividend-oriented exchange traded funds, but they aren’t carbon copies of each other. For its part, VIG – largest dividend ETF trading in the U.S. – focuses on companies with dividend increase streaks of at least 10 years.
Income-minded investors can turn to an innovative exchange traded fund strategy that may help enhance yield generation by up to 4X the S&P 500 dividend yield with modestly lower exposure to the broader equities market. In recent webcast, Is Your Client Getting Enough Yield?