Published Wed, 18 Jul 2018 06:11:05 -0400 on Seeking Alpha
On July 17th, the Global X S&P 500® Quality Dividend ETF (QDIV) began trading on the CBOE. QDIV invests in U.S. equity securities included in the S&P 500® Index that rank within the top 200 of the index’s universe by both quality score and dividend yield.
In June, the Federal Reserve (Fed) raised interest rates for the 7th time since the financial crisis and indicated it was on pace for two more rate increases in 2018. For income-seeking investors, the rising interest rate environment has created a conundrum: while bond yields are finally becoming more attractive after years of historically low rates, the value of the principal of these instruments is under threat as interest rates are expected to march higher. One solution is for investors to look at other sources of income, such as dividend paying stocks. Dividend stocks may not only provide a more tax-advantaged income stream to investors than fixed-income coupon payments, but they also have the potential to appreciate in value as the economy strengthens. Dividends can be taxed at qualified dividend rates whereas fixed income coupon payments are typically taxed at higher ordinary income rates.
A Look at Dividend Styles We have previously written about how dividend investing is not one-size fits all. Given the breadth of stocks that pay dividends, there are a variety of strategies that can be implemented to target different groups of dividend payers based on certain characteristics, like screening for... Read more