SPDV
advisors asset management's
S&P High Dividend Value ETFs
What supports our expectations for 2021?
©2024 Advisors Asset Management. Advisors Asset Management, Inc. (AAM) is an SEC-registered investment advisor and member FINRA/SIPC. Registration does not imply a certain level of skill or training. AAM ETFs are distributed by Quasar Distributors, LLC. Quasar and AAM are not affiliated.
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Characteristics
Historically
Higher Yield
Income
What is a bond ladder?
Like common stock, preferred and hybrid securities represent ownership in a company and have the potential to appreciate (or decline) in price.
Like bonds, they offer a fixed or floating dividend, similar to a bond coupon, and often carry a credit rating from a recognized rating agency.
In the capital structure, preferred and hybrid securities fall between debt holders and common stock holders.
TAX-EXEMPT INCOME
Low Correlation
How It Works
How It Works
Assuming an initial investment of $100,000, an investor purchases five bonds with staggered maturities extending out every two years. The laddered bond portfolio has a combined average annual yield of 3.42% and an average duration of 6 years.
2-Year
4-Year
6-Year
8-Year
10-Year
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
2.05
%
%
2.65
%
3.60
%
4.15
4.65
%
Assuming an initial investment of $100,000, an investor purchases five bonds with staggered maturities extending out every two years. The laddered bond portfolio has a combined average annual yield of 3.42% and an average duration of 6 years.
At the end of year two, the shortest bond matures and the four remaining bond investments are now two years closer to their maturity date. Proceeds from the maturing bond are reinvested back into the 10-year bond. The combined average annual yield of the new laddered bond portfolio is 4.05% and the average duration would remain at 6 years.
Original Ladder
2-Year
4-Year
6-Year
8-Year
10-Year
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
2.05
%
%
2.65
%
3.60
%
4.15
4.65
%
BOND A
$20,000
BOND B
$20,000
BOND C
$20,000
BOND D
$20,000
BOND E
$20,000
ladder two years later
BOND
MATURED
2-Year
4-Year
6-Year
8-Year
10-Year
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
6.00%
0.00
%
2.65
%
3.60
%
4.15
%
4.65
%
5.20
%
BOND A
$20,000
BOND B
$20,000
BOND C
$20,000
BOND D
$20,000
BOND E
$20,000
ladder two years later
BOND
MATURED
2-Year
4-Year
6-Year
8-Year
10-Year
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
6.00%
0.00
%
2.65
%
3.60
%
4.15
%
4.65
%
5.20
%
BOND A
$20,000
BOND B
$20,000
BOND C
$20,000
BOND D
$20,000
BOND E
$20,000
Ladder Two Years Later >>
<< ORIGINAL LADDER
This hypothetical example is for illustrative purposes only and does not represent the performance of any specific investment. Bond income is not guaranteed and may be subject to call risk as well as default risk, which increases with lower-rated bond securities.
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1. Source: S&P. For the period 12/30/1960 - 12/31/2022.
2. J. Siegel. “The Future for Investors: Why the Tried and the True Triumph Over the Bold and the New” 2005, pp. 127.
3. Source: Ned Davis Research. For the periods 1/31/1973-12/31/2022. Based on equal-weighting geometric average of total returns (including dividends) of dividend-paying and non-dividend-paying historical S&P 500 stocks. Uses Indicated Annual Dividends to identify dividend-paying stocks on a rolling 12-month basis.
The AAM S&P High Dividend Value ETFs investment objectives, risks, charges and expenses must be considered carefully before investing. Each fund’s statutory and summary prospectuses contains this and other important information about the investment company, and may be obtained by calling 800.617.0004 or visiting www.aamlive.com.
Read it carefully before investing.
Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV) and may trade at a discount or premium to NAV. Shares are not individually redeemable from the Fund and may be only be acquired or redeemed from the fund in creation units. Brokerage commissions will reduce returns. Companies with high yield or payout ratio may underperform other securities in certain market conditions and reduce or discontinue paying dividends entirely while included in the index. The Funds’ returns may not match or achieve a high degree of correlation with the return of the underlying Index. To the extent the Fund utilizes a sampling approach, it may experience tracking error to a greater extent than if the Fund had sought to replicate the Index. Investments in non-U.S. securities may be subject to risk of loss due to foreign currency fluctuation or to political or economic instability. Investments in mid-cap companies may involve less liquidity and greater volatility than larger companies.
Diversification does not assure a profit or protect against a loss in a declining market. Fund holdings and/or sector allocations are subject to change at any time and are not recommendations to buy or sell any security. Past performance does not guarantee future results. Index performance is not illustrative of fund performance. Please visit www. aamlive.com for fund performance. There is no guarantee that distributions will be made.
Definitions: Cash flow is the net amount of cash and cash-equivalents moving into and out of a business. Dividend yield is a stock’s annual dividend relative to the stock price. Free cash flow is the excess cash that a business has after paying all of the operations and capital expenditures. Free cash flow yield is a stock’s free cash flow per share relative to the stock price. The price/earnings ratio (often shortened to the P/E ratio or the PER) is the ratio of a company’s stock price to the company’s earnings per share. The price-to-book value (P/BV) ratio is calculated by dividing the current closing price of the stock by the latest quarter’s book value per share. The price/sales (P/S) ratio is calculated either by dividing the company’s market capitalization by its total sales over a 12-month period, or on a per-share basis by dividing the stock price by sales per share for a 12-month period. The price-to-cash flow (P/CF) ratio is calculated by dividing the company’s stock price with the quantity of its cash inflows, minus its cash outflows over a given time, usually a year. This ratio is similar to a company’s price-earnings ratio, but it does not take into account earnings that have not actually been received. Correlation is a statistical measure of how two variables move in relation to each other with coefficients ranging from +1 to -1. A correlation coefficient of +1 implies that as one variable moves, the other will move in exact lockstep. Alternatively, a correlation coefficient of -1 implies that if one variable moves, the other moves in the same amount in the opposite direction. If the correlation is 0, the movements of the variables are completely random. Earnings per share (EPS) is the portion of a company’s profit allocated to each outstanding share of common stock. Earnings per share serve as an indicator of a company’s profitability.
S&P 500 Index is an unmanaged market capitalization weighted index used to measure 500 companies chosen for market size, liquidity and industry grouping, among other factors. It is not possible to invest directly in an index. Dow Jones US Select Dividend Index is an unmanaged index that aims to represent the US’s leading stocks by dividend yield and dividend coverage ratio, amongst other factors. The Morningstar US Dividend Growth Index is an unmanaged index that tracks U.S.-based securities with a history of uninterrupted dividend growth. The index is a subset of the Morningstar US Market Index, a broad market index representing 97% of U.S. equity market capitalization. The Value Line® Dividend Index is an unmanaged index that aims to track US listed stocks that have been given a proprietary Safety™ Ranking of #1 or #2 using the Value Line Safety™ Ranking System in addition, but not limited to, other qualifying criteria such as dividend yield and market capitalization. The S&P 500 Low Volatility High Dividend Index is an unmanaged index that measures the performance of the 50 least-volatile high dividend-yielding stocks in the S&P 500. The index is designed to serve as a benchmark for income-seeking investors in the U.S. equity market. The NASDAQ US Dividend Achievers Select Index is an unmanaged indes comprised of a select group of securities with at least ten consecutive years of increasing annual regular divdiends payments, amongst other factors. The S&P High Yield Dividend Aristocrats® Index is an unmanaged index designed to measure the performance of companies within the S&P Composite 1500® that have followed a managed-dividends policy of consistently increasing dividends every year for at least 20 years. S&P Composite 1500® is an unmanaged index that combines three leading indices, the S&P 500®, the S&P MidCap 400®, and the S&P SmallCap 600®, to cover approximately 90% of U.S. market capitalization. The S&P MidCap 400® is an unmanaged index that provides investors with a benchmark for midsized companies. The index is designed to measure the performance of 400 mid-sized companies, reflecting the distinctive risk and return characteristics of this market segment. The S&P SmallCap 600® is an unmanaged index that seeks to measure the small-cap segment of the U.S. equity market. The index is designed to track companies that meet specific inclusion criteria to ensure that they are liquid and financially viable.
The Dow Jones U.S. Dividend 100 Index is an unmanaged index designed to measure the performance of high-dividend-yielding stocks in the U.S. with a record of consistently paying dividends, selected for fundamental strength relative to their peers, based on financial ratios. The Morningstar Dividend Yield Focus Index is an unmanaged index that tracks high-yielding, dividend-paying, U.S.-backed securities screened for superior company quality and financial health, amongst other factors. The S&P 500® Dividend Aristocrats® is an unmanaged index that measures the performance of S&P 500 companies that have increased dividends every year for the last 25 consecutive years. The Index treats each constituent as a distinct investment opportunity without regard to its size by equally weighting each company.
The S&P Dividend and Free Cash Flow Yield Indexes are products of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”), and have been licensed for use by Advisors Asset Management, Inc. (AAM). Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by AAM. The S&P Dividend and Free Cash Flow Yield Indexes are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P Dividend and Free Cash Flow Yield Indexes. It is not possible to invest directly in an index.
Chart/Graph Disclosure: The charts/graphs included in this publication do not reflect past or current recommendations made by AAM, “they” should be considered an academic treatment of empirical data and should not be used to predict security prices or market levels. Any suggestion of cause and effect or of the predictability of economic cycles or investment cycles is unintentional. Best of 2021 was created using empirical research and analysis by highly experienced market observers and is designed for educational purposes only. This publication should only be considered as a tool in any financial professional’s investment decision matrix. Investors should consult their financial professional when applying the assumptions of these charts/graphs.
Not FDIC Insured. Not Bank Guaranteed. May Lose Value.
High Dividend Value Potential Benefits:
And let us not forget that Harry and Meghan stepped down from the royal family all the way back in January.
From an investor’s standpoint, the US equity market experienced its steepest decline with the Dow Jones Industrial Average (DJIA) dropping 37.1% from its peak on February 12 to its trough on March 23, 2020, a total of 27 trading days. By mid-November, sentiment had transitioned to focus on the vaccine, a rebound in unemployment (despite remaining higher than pre-COVID) as well as the benefits of the considerable economic stimulus and quantitative easing. The DJIA more than recovered its losses, closing the year over 30,000, a new all-time high. While this was the fastest rebound by the DJIA in over 30 years, the S&P 500 and Nasdaq Indexes recovered their losses even more quickly, hitting new highs in August and June, respectively.
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Characteristics
CHARACTERISTICS of both common stock and bonds
Historically
Higher Yield
On an aggregate level, stimulus funds provided in the CARES Act did as expected and helped many households survive. It also had a massively positive impact on disposable income per capita. In fact, households’ level of cash to debt rose to 95%, a level not seen since 1991. An increase in a household’s future relative disposable income can therefore be used to either increase savings (as has been the case since the end of the Great Financial Crisis) or increase consumption, which would bode well for future spending levels.
Furthermore, housing has seen a generational boom, helped by the belief that the shift to working from home may be permanent for at least 25% of the workforce. Although combined inventory in both autos and homes are at historic lows, housing affordability stands at a favorable level (though off its highs of 2012-2014) mainly due to low mortgage rates. In fact, according to the Federal Reserve, households’ average mortgage debt service ratio is 3.72%, a historically low level.
Please note that the data analyzed is aggregate, and we understand that it overlooks individual situations and experiences.
Overall, large corporations have survived the sudden shock of economic shutdowns, primarily due to the ample liquidity in the capital markets supplied by the Federal Reserve. We do note the substantial number of credit downgrades and select companies’ vulnerability to profits, however for the first time in history we see that corporate liquid assets exceed short-term liabilities.
Low Correlation
Income
The steepening of the yield curve is another metric indicating that growth has been building in the US economy. With the heavy manipulation that quantitative easing has on the curve, we monitor the 30-year and 5-year maturities.
From its lows in March 2020 of 51 basis points, the 30-year has risen to a current level of 85 basis points (as of 01/07/2021).
What makes preferred and hybrid securities an attractive asset class?
Simply put, many investors have turned to dividend-paying stocks to help meet current cash flow needs, but many overlook the impact dividends have played in the creation of long-term wealth.
AAM’s S&P High Dividend Value ETFs track the S&P Dividend & Free Cash Flow Yield Index series, which was designed to uncover stocks that maximize dividend yield without sacrificing dividend sustainability. The selection methodology utilizes a distinct, common sense process focused on high dividend yield and high free cash flow yield. Combining these factors seeks to identify high dividend-paying and financially strong companies. AAM’s S&P High Dividend Value ETFs offer the opportunity to access these stocks across the globe.
Highlights of the Fund's Investment Approach
1/2
5/6
Sub-advised by Insight Investment, a global specialist asset manager with deep experience and resources in fixed income management
6
%
6/6
May work as a standalone investment or as a complement to other active and passive fixed income strategies
What do we see that may finally drive inflation higher?
The Power of Dividends
High Dividend Yield
1.
1.
2/4
Dividend Growth
2.
2/2
2.
4/4
Attractive Income/Duration Profile
1
Overweight emerging markets including broad-based Asia, Eastern Europe and South America more specifically China, Russia, Brazil, Argentina, and India.
Increase allocation to value sectors including Materials, Industrials, Financials and Energy. We caution against being overly exposed to sectors whose fundamentals fall outside of historical norms such as “big tech” and social media companies, to name a few.
Increase allocation to mid-and small-cap equities relative to large capitalization.
Increase allocation to commodities. We view this as a once-in-a-generation opportunity driven by:
-
weakened purchasing power of major world fiat currencies due to record monetary stimulus flooding global economies.
a huge spike in demand due to massive fiscal stimulus prompted by the pandemic.
significant under-investment in replenishing the world’s stock of commodities over the past decade.
-
-
Increase vigilance with regard to the impact of higher inflation and a weakening US dollar.
Interest rates move higher due to rising inflation, Central Bank stimulus, supply dynamics and steady economic recovery.
Actively monitor fixed income to navigate the lagging impact of credit ratings and increased sensitivity to Central Bank purchases, which typically amplify the vulnerability of prices to an increase in rates.
As illustrated below, low(er) duration preferred and hybrid securities offered a higher yield than many other fixed income vehicles, even longer-duration investments.
2.
3.
4.
5.
6.
7.
8.
What Differentiates AAM S&P High Dividend Value Strategy?
We expect uneven economic growth to continue, global Central Banks to maintain their accommodative stances, corporate earnings to recover and an increase in overall consumption, however risks remain.
Record liquidity can be seen in frothy equity pricing. The higher level of optimism may begin to cannibalize future growth at some point. To offset this, we tend to see higher levels of merger and acquisition (M&A) activity that may be cynically masking lower growth metrics. For those that suffer this blessing, massive stock buy backs will likely be needed to help boost the growth needed to support fundamental metrics.
SECTOR DIVERSIFICATION
The selection process targets five stocks from each of the 11 GICS sectors and equally weights each security. This avoids sector “bets” commonly seen in many dividend-focused ETFs that are overweight high-yielding sectors such as Real Estate or Utilities.
ATTRACTIVE VALUATIONS
Focusing on high dividend yield and high free cash flow yield has resulted in ETFs with deep value characteristics including lower average price to earnings (P/E), price/sales (P/S), price to book value (P/ BV) and price to cash flow (P/CF) ratios than many broad market benchmarks.
MONTHLY DISTRIBUTIONS
SPDV, DMDV and EEMD make monthly distributions, which provides shareholders flexibility in meeting their current cash flow obligations or reinvesting the dividends to leverage the powerful effect of compounding.
Interested in Finding Out More?
Seeks to:
High Equity Income
Dividend Sustainability/Growth
Sector Diversification
Attractive Valuations
Senior Debt
Subordinated Debt
Hybrid Debt
Preferred Securities
Common Stock
Repayment Priority
Preferreds have tended to offer higher yields than similarly-rated bonds due to their lower claim on a company's assets in the event of liquidation.
HISTORICALLY HIGHER YIELD vs. traditional fixed income classes
Yield to Maturity (%) as of 12/31/21
1.44
U.S. Treasuries
2.17
Municipals
2.40
IG
Corporates
4.90
High Yield Corporates
3.62
Preferreds
Preferred and hybrid securities have low historical correlations to traditional stocks and bonds, which may help mitigate downside risk in falling markets.
LOW CORRELATION to traditional fixed income classes
Not only have preferred securities tended to offer higher yields than similarly-rated bonds, but they generally pay qualified dividend income, which is taxed at lower rates than ordinary income.
Tax-Advantaged INCOME
FACT CARD
Past performance does not guarantee future results. It is not possible to invest directly in an index. Index information is not representative of any AAM product. Preferreds represented by ICE Exchange-Listed Preferred & Hybrid Securities Index. High Yield Corporates represented by the ICE BofA US High Yield Index. Investment Grade Corporates represented by the ICE BofA US Corporate Index. US Treasuries represented by ICE BofA 7-10 Year US Treasury Index. Municipal Bonds represented by ICE US Broad Municipal Index. Low Duration Preferreds represented by the ICE 0-5 Year Duration Exchange-Listed Preferred & Hybrid Securities Index. Low Duration Corporates represented by the ICE BofA 1-5 Year US Corporate Index.
Any tax or legal information provided is a summary of our understanding and interpretation of some of the current income tax regulations and is not exhaustive. Investors must consult their tax advisor or legal counsel for advice and information concerning their particular situation. Neither the Fund nor any of its representatives may give legal or tax advice.
Past performance does not guarantee future results. It is not possible to invest directly in an index. Index information is not representative of any AAM product. Asset classes shown may have significantly different features and risk profiles. US Treasury Bills are guaranteed as to the timely payment of principal and interest and are backed by the full faith and credit of the US Government.
Yield to Maturity Represented By: US Treasuries represented by ICE BofA 7-10 Year US Treasury Index. Municipal Bonds represented by ICE US Broad Municipal Index. Investment Grade Corporates represented by the ICE BofA US Corporate Index. High Yield Corporates represented by the ICE BofA US High Yield Index. Preferreds represented by ICE Exchange Listed Preferred & Hybrid Securities Index. Please see bottom of page for index descriptions.
John Smith, XYZ Corporation
2
2
3
3
4
4
5
5
6
6
7
7
8
9
Low-Duration Preferreds
Low-Duration Corporates
Option-Adjusted Duration (Years)
Yield to Maturity (%)
Yield to Maturity/Option-Adjusted Duration (as of 12/31/21)
High Yield Corporates
Preferreds
Municipal
Bonds
7-10 Year
Treasuries
Investment Grade Corporates
DMDV
SPDV
IG = Investment Grade
Monthly Distributions
EEMD
Approximately 84% of the S&P 500’s total return since 1960 has come from dividends and the compounding of those dividends.¹ There are two distinct camps typically utilized when investing in dividend-payers, high dividend yielders and high dividend growth stocks. Each strategy has been proven to be effective on a stand-alone basis, however they aren’t necessarily mutually exclusive. In fact, the benefits of equity income are a function of both the starting yield and the growth of that yield over time.
In today’s low rate environment, many investors have turned to dividend-paying stocks to help meet current cash flow needs, but many overlook the impact dividends have played in the creation of long-term wealth.
AAM's Process...
SPDV, DMDV and EEMD select five (5) stocks from each of the 11 GICS sectors that exhibit the most attractive combination of high dividend yield and high free cash flow yield. This selection process creates a well-diversified portfolio of high-yielding stocks with strong cash flow that are also positioned to maintain, and possibly grow, their dividend in the future.
To further enhance the ETFs’ value proposition, each security is equally-weighted and the ETFs are rebalanced semiannually.
Many market pundits like to cite revenue or earnings per share (EPS) when assessing the financial stability of a firm, but we argue that cash flow from operations, more specifically free cash flow yield, may be a better measure of the potential for dividend sustainability and growth. Unlike earnings or revenues, free cash flow is difficult to manipulate with accounting practices, and we believe may be a better indicator of a company’s solvency and liquidity.
Not only has free cash flow yield been a valuable indicator of dividend sustainability, it may also be an indicator of financially strong companies that are well-positioned to succeed. Free cash flow may be used to pay dividends, but it can also be used to repay debt, pay interest expenses, repurchase shares or fund future growth projects — all generally positive for a stock.
Finally, from a portfolio construction standpoint, S&P Dow Jones found in a research report titled Incorporating Free Cash Flow Yield in Dividend Analysis that the negative correlation between dividend yield and free cash flow yield indicates that combining these factors in a multi-factor framework can potentially offer diversification benefits.
Since dividends are paid in cash, doesn’t it make sense that the generation of free cash flow would be a valuable attribute for a company that could maintain or grow its dividend in the future? We think so.
Why Are Dividend Yield & Free Cash Flow Yield Such a Powerful Combination?
Separate From the
Dividend Index Herd
As illustrated below, low(er) duration preferred and hybrid securities offered a higher yield than many other fixed income vehicles, even longer-duration investments.
Free Cash Flow (%)
Dividend Yield & Free Cash Flow of the Most Popular Indices (as of 12/31/21)
Dividend Yield (%)
2
3
4
5
6
7
8
9
1
2
3
4
5
6
7
Low-Duration Preferreds
Low-Duration Corporates
High Yield Corporates
Preferreds
Municipal
Bonds
7-10 Year
Treasuries
Investment Grade Corporates
Past performance does not guarantee future results. It is not possible to invest directly in an index. Index information is not representative of any AAM product. Preferreds represented by ICE Exchange-Listed Preferred & Hybrid Securities Index. High Yield Corporates represented by the ICE BofA US High Yield Index. Investment Grade Corporates represented by the ICE BofA US Corporate Index. US Treasuries represented by ICE BofA 7-10 Year US Treasury Index. Municipal Bonds represented by ICE US Broad Municipal Index. Low Duration Preferreds represented by the ICE 0-5 Year Duration Exchange-Listed Preferred & Hybrid Securities Index. Low Duration Corporates represented by the ICE BofA 1-5 Year US Corporate Index.
Overweight emerging markets including broad-based Asia, Eastern Europe and South America more specifically China, Russia, Brazil, Argentina, and India.
2.
Increase allocation to value sectors including Materials, Industrials, Financials and Energy. We caution against being overly exposed to sectors whose fundamentals fall outside of historical norms such as “big tech” and social media companies, to name a few.
3.
Increase allocation to mid-and small-cap equities relative to large capitalization.
4.
Increase allocation to commodities. We view this as a once-in-a-generation opportunity driven by:
5.
-
-
-
significant under-investment in replenishing the world’s stock of commodities over the past decade.
weakened purchasing power of major world fiat currencies due to record monetary stimulus flooding global economies.
a huge spike in demand due to massive fiscal stimulus prompted by the pandemic.
Increase vigilance with regard to the impact of higher inflation and a weakening US dollar.
6.
Interest rates move higher due to rising inflation, Central Bank stimulus, supply dynamics and steady economic recovery.
7.
Actively monitor fixed income to navigate the lagging impact of credit ratings and increased sensitivity to Central Bank purchases, which typically amplify the vulnerability of prices to an increase in rates.
8.
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Focusing on both a high dividend yield and a high free cash flow yield has tended to uncover value-oriented companies with stable product lifecycles while maintaining long-term growth potential.
Together, a high dividend yield and high free cash flow yield have the opportunity to complement traditional bond and equity portfolios while providing potential benefits which are missing from many traditional equity dividend strategies.
Dividend Yield & Free Cash Flow of the Most Popular Indices (as of 3/31/24)
For investors seeking solid and durable dividend income, along with sector diversification and monthly distributions, AAM’s S&P High Dividend Value ETF suite may be a welcome addition.
AAM S&P 500 High Dividend Value ETF
DMDV
AAM S&P Developed Markets High Dividend Value ETF
EEMD
AAM S&P Emerging Markets High Dividend Value ETF
The first is to focus on stocks with the highest dividend yield. High-dividend-yielding equities have historically generated higher returns than their low-yielding peers. According to a study done by Professor J. Siegal, the top 20% of the highest-dividend-yielding stocks in the S&P 500 produced an annualized return of 14.27% between 1957 and 2002, higher than the return of 11.19% of the S&P 500 Index.² Learn More.
Stocks that are well-positioned to grow their dividend may not offer the same level of income as their high yielding counterparts, however, they may help investors avoid less financially sound companies which may cut or eliminate their future dividend payments. This is important because stocks which have cut, or eliminated, their dividend have underperformed their non-dividend cutting peers.³ Learn More.
SPDV
DMDV
EEMD
...seeks to address many perceived shortfalls of other dividend-focused ETFs.
These include:
Source: FactSet. Past performance does not guarantee future results.