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How To Reduce Risk With Dividend ETFs

Published Mon, 17 Dec 2012 18:30:09 -0500 on Seeking Alpha

Investors can lower risk in their stock portfolios with dividend ETFs, but they should keep in mind the equity-based funds shouldn't be substituted for bonds. When playing the income game, exchange traded fund investors have been increasingly reaching for yields. According to fund tracker EPFR Global, investors funneled $34 billion into dividend stock funds so far this year, The Wall Street Journal reports. With the 1.60% yield in the 10-year Treasury market and the 2.3% yield in the S&P 500, investors have turned to dividend picks as a way to generate more income. However, investors should not confuse dividend stocks with fixed-income assets, especially during volatile market conditions. For instance, in the third quarter of 2011, the WisdomTree LargeCap Dividend ETF (DLN) dropped 9.7%, while the Barclays U.S. Aggregate Bond Index rose 3.8%. Moreover, Owen Murray, director of investments at Horizon Advisors, warns that investors should not... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
SPDR S&P DIVIDEND ETF 92.95   0.0 0.00 2.25 2.42


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