Published Mon, 09 Nov 2020 21:50:08 -0500 on Seeking Alpha
Seeking AlphaETF AnalysisiShares Select Dividend ETF: Cash Flow And SafetyNov. 9, 2020 9:50 PM ET|| About: iShares Select Dividend ETF (DVY), Includes: XLF, XLUby: Michael A. Gayed, CFAMichael A. Gayed, CFA The Lead-Lag ReportAnticipate Corrections and Volatility with Award Winning ResearchSummaryHighly diversified portfolio across sectors and companies.
Very aggressive in terms of dividend payout.
A more hands on approach to fund management: stronger risk diversification, higher yield.
Risk comes from not knowing what you’re doing.
– Warren Buffett
The iShares Select Dividend ETF (Nasdaq: DVY) invests in stocks of companies operating across diversified sectors and diversified market capitalizations. It targets stocks that have a high dividend payout. In this, it seeks to emulate the performance of the Dow Jones US Select Dividend Index, investing at least 90% of its assets in securities of the underlying index and in the depositary receipts, representing securities of the underlying index.
The index measures the US's leading stocks' performance by dividend yield and consists of 100 stocks with strong five-year records of paying dividends.
The fund's price started to decrease with the market, from its high of $107.36 in March of 2020, reaching a low of below $61.89, before starting to recover in the subsequent period. However, even after the recovery, it is still trading at a significant discount of around $86-87 from its March 2020 price.
However, the share price has seen a positive upward trend overall for investors. The movement can be explained by banks like Morgan Stanley (MS) adding to their investment portfolios by taking up fresh stakes in the fund after prices crashed, no doubt taking advantage of the discount being offered by the market.
The recovery in price was also helped because three of the fund's underlying holdings have shown notable price increases, helping boost the fund's net asset value and, therefore, the... Read more
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