Uncovering yield south of the border
Over the past few years, many investors have chosen to park their money in the bond market, driving prices up significantly and forcing yields lower. While bond yields have increased lately, they are still close to historic lows. Meanwhile, income generation and higher yield equities remain a focus for many investors.
Historically high-quality dividend stocks have offered compelling potential for both capital appreciation and income. Additionally, dividend stocks generally have been less volatile than the broader market, which can make them a good defensive choice.
Looking at the chart below we can see that the return of the S&P High Yield Dividend Aristocrats Index Total Return Index has outpaced the S&P Composite 1500 Total Return Index by 18% over a five year period. The S&P High Yield Dividend Aristocrats index is 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.
Focus on High, Sustainable Dividends Delivers 18% More
Source: S&P Dow jones Indices from August 25, 2008 to August 23, 2013. Returns in U.S. dollars
|Related iShares Funds||Description||Distribution Frequency||Distribution Yield*|
|XHD||iShares U.S. High Dividend Equity Index Fund (CAD-Hedged)||Access to 75 U.S. stocks that pay high dividends in a single trade||Monthly||2.92%|
|CUD||iShares S&P US Dividend Growers Index Fund (CAD-Hedged)||A portfolio of high quality U.S. companies that have consistently increased dividends over time||Monthly||1.66%|
* As of August 26, 2013