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7 Dividend ETF Winners of 1H16 Worth a Watch in 2H
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If there’s any equity ETF segment that has delivered an all-square performance this year, then that is dividend. This space has made a killing thanks to the volatile stretches of 2016 right from the start. The beginning of the year was extremely choppy as the spike in the Chinese market upheaval and a 12-year low oil prices made the market to go berserk.
While there was a respite at the onset of Q2 thanks to a volley of upbeat U.S. economic data points, oil price recovery and stabilization in the global market, the relief-rally was short-lived. The U.S. economy suddenly lost momentum if we go by the slowing job growth data for the month of April and May, forcing the Fed to stay put again in the June meeting.
Why to Look at Dividends in 2H
As the year entered June, Brexit (i.e., Britain exiting the European Union (EU) fears took the center stage, pushing global risky assets into a tailspin. Volatility levels crept up and almost the entire world got busy in predicting recessionary threats for the U.K. economy if it cut ties with the EU. The event’s negative repercussions on the global economy and investments was another cause of concerns.
The sheer uncertainty surrounding the Brexit outcome was spooky enough to derail the market momentum. Now, the official Brexit decision following the June 23 referendum will understandably take the market by storm. As feared, since the referendum, there has been a bloodbath in most global securities, with the in-focus country (EWU - Free Report) , U.K.’s currency ETF FXB and the Euro zone ETF (EZU - Free Report) sliding the most (read: Beat Brexit-Induced Sell-Off via These Inverse ETFs).
All these instigated a safe-haven rally with yields on the benchmark 10-year U.S. Treasuries slumping to a four-year low. On June 27, 2016, the yield on 10-year U.S. Treasury was 1.46%, down from 2.24% seen at the start of the year. As a result, yield-hungry investors rushed to high-dividend securities and ETFs in search of steady-current income (read: Treasury Headed for Best Run: 5 Outperforming ETFs).
There is yet another benefit of dividend investing. Even if investors end up suffering capital losses (at all) in an investment, the current income of the investment would go a long way in protecting total returns.
Dividend ETF Outperformers
With the global market likely to remain rocky in the coming months, a look at the best performing dividend ETFs of the first half of 2016 seems warranted. Notably, the S&P 500-based ETF SPY stands nowhere near dividend ETFs this year. While SPY is now in the red (down over 2%) from a year-to-date look (as of June 27, 2016), these dividend ETFs crushed SPY with solid returns.
Below we highlight seven dividend ETF outperformers of 1H16 that may entice you in 2H or as long as the market remains rocky. Investors should also note that most of the below-mentioned ETFs are high quality in nature armed with attributes like low volatility or a history of regular hike in dividend. These products are believed to deal with erratic markets more efficiently than the traditional products (read: High Quality Dividend Stocks & ETFs for Uncertain Markets).
Legg Mason Low Volatility High Dividend ETF (LVHD - Free Report) – Up 11.8%
PowerShares High Yield Equity Dividend Achievers ETF (PEY - Free Report) – Up 10.9%
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7 Dividend ETF Winners of 1H16 Worth a Watch in 2H
If there’s any equity ETF segment that has delivered an all-square performance this year, then that is dividend. This space has made a killing thanks to the volatile stretches of 2016 right from the start. The beginning of the year was extremely choppy as the spike in the Chinese market upheaval and a 12-year low oil prices made the market to go berserk.
While there was a respite at the onset of Q2 thanks to a volley of upbeat U.S. economic data points, oil price recovery and stabilization in the global market, the relief-rally was short-lived. The U.S. economy suddenly lost momentum if we go by the slowing job growth data for the month of April and May, forcing the Fed to stay put again in the June meeting.
Why to Look at Dividends in 2H
As the year entered June, Brexit (i.e., Britain exiting the European Union (EU) fears took the center stage, pushing global risky assets into a tailspin. Volatility levels crept up and almost the entire world got busy in predicting recessionary threats for the U.K. economy if it cut ties with the EU. The event’s negative repercussions on the global economy and investments was another cause of concerns.
The sheer uncertainty surrounding the Brexit outcome was spooky enough to derail the market momentum. Now, the official Brexit decision following the June 23 referendum will understandably take the market by storm. As feared, since the referendum, there has been a bloodbath in most global securities, with the in-focus country (EWU - Free Report) , U.K.’s currency ETF FXB and the Euro zone ETF (EZU - Free Report) sliding the most (read: Beat Brexit-Induced Sell-Off via These Inverse ETFs).
All these instigated a safe-haven rally with yields on the benchmark 10-year U.S. Treasuries slumping to a four-year low. On June 27, 2016, the yield on 10-year U.S. Treasury was 1.46%, down from 2.24% seen at the start of the year. As a result, yield-hungry investors rushed to high-dividend securities and ETFs in search of steady-current income (read: Treasury Headed for Best Run: 5 Outperforming ETFs).
There is yet another benefit of dividend investing. Even if investors end up suffering capital losses (at all) in an investment, the current income of the investment would go a long way in protecting total returns.
Dividend ETF Outperformers
With the global market likely to remain rocky in the coming months, a look at the best performing dividend ETFs of the first half of 2016 seems warranted. Notably, the S&P 500-based ETF SPY stands nowhere near dividend ETFs this year. While SPY is now in the red (down over 2%) from a year-to-date look (as of June 27, 2016), these dividend ETFs crushed SPY with solid returns.
Below we highlight seven dividend ETF outperformers of 1H16 that may entice you in 2H or as long as the market remains rocky. Investors should also note that most of the below-mentioned ETFs are high quality in nature armed with attributes like low volatility or a history of regular hike in dividend. These products are believed to deal with erratic markets more efficiently than the traditional products (read: High Quality Dividend Stocks & ETFs for Uncertain Markets).
Legg Mason Low Volatility High Dividend ETF (LVHD - Free Report) – Up 11.8%
PowerShares High Yield Equity Dividend Achievers ETF (PEY - Free Report) – Up 10.9%
ProShares S&P MidCap 400 Dividend Aristocrat (REGL - Free Report) – Up 10.8%
PowerShares S&P 500 High Dividend Low Volatility ETF (SPHD - Free Report) – Up 9.1%
ProShares Russell 2000 Dividend Growers (SMDV - Free Report) – Up 9.6%
iShares Select Dividend (DVY - Free Report) – Up 8.3%
SPDR S&P 500 High Dividend ETF (SPYD - Free Report) – Up 9%
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>