![]() ![]() ![]() Note that the cumulative average is the running average of 1-year returns anchored to the 0th percentile. The following table shows 1-year return percentile data. On a $100,000 initial investment, that's an extra ~$22,000 worth of return. In fact, investors in SPY would have enjoyed an extra 1% annualized return over the 20+ year period on average. The results show that SPY outperformed DVY since the beginning of 2004, having a higher average return, lower standard deviation, and higher adjusted return. It definitely produces more current income but how has it performed over the long term respective to total return? The following table helps us gain some insight.ĭividend ETF to SPY Comparative Performance Analysis, 2004-present (Michael Thomas) Focusing on dividends for stock selection and weighting, it gives exposure to roughly 100 stocks with a minimum 5-year history of paying dividends with an emphasis on payout ratio and dividend growth.ĭVY carries a current dividend yield of 3.73%, more than doubling SPY's 1.50%. It seeks to track the Dow Jones US Select Dividend Index. The iShares Select Dividend ETF ( DVY) was the earliest dividend-focused ETF to emerge in late 2003. Adjusted return is the return squared divided by standard deviation. I also use adjusted returns to directly compare ETF performance while taking into account volatility. The ranks are averaged to find an overall rank for both the 1-year return and cumulative average, which gauges consistency in returns. Percentiles are divided into deciles and individually ranked. The distribution of returns is also detailed through percentile tables and is used to further massage data in an effort to find underlying trends. Each one of these is considered an equal probability outcome giving a much fuller representation of performance over the period. So over a 10-year period, instead of using a single start date and a single end date to calculate performance, I use 2,266 start and end date combinations. In a major deviation from what the majority of financial sites present for historical performance measures, I derive annual return figures by taking every possible 1 year return period in the time frame in question. The following table outlines popular dividend-themed ETFs covered in this article.ĭividend ETFs For Comparative Analysis (Michael Thomas) The following analysis attempts to provide insight into the relative total return performance of several popular dividend-themed ETFs to the market benchmark, the SPDR S&P 500 ETF Trust ( NYSEARCA: SPY ). Lastly, there are those who contend overall total return is the end game and it doesn't matter where it comes from, dividends or not. For others, it's a belief that certain properties of dividend-paying assets provide for better long-term performance. For some, it is a matter of focusing on dividends for current income needs. Many arguments have been had related to the advantages, or disadvantages, of dividend-focused investing. ![]()
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