Equity: U.S. - High Dividend Yield

SDY Top Performer Intra-day
Price $88.27
Today’s Change +0.28%(0.32)
4:00pm 02/17/2017
PEY Bottom Performer Intra-day
Price $17.03
Today’s Change -0.08%(-0.47)
4:00pm 02/17/2017
  • Overview
  • Efficiency
  • Tradability
  • Fit

ETF.com Insight

The US high-dividend yield segment continues to demonstrate very strong investor interest, with roughly half of the funds holding more than $1B each.
With bond yields at historic lows,exposure differences drive performance equity income has become an increasingly popular strategy. Investors now have more than a dozen funds to choose from in this space, each with its own way of selecting, weighting and defining the high-yield market. Screens range from those that require companies to have a 12-month history of rising dividends to those that require 25 years of rising payouts. There are funds with narrow portfolios of 50 names, and funds that hold nearly 1,000. Some funds tilt toward utilities, while others tilt toward health care, energy or tech.
Perhaps most critically, dividend yields range from 2% to over 6%. Choosing the right fund comes down to parsing these choices. Do you want a portfolio that’s heavy on utilities with broad-based exposure to the dividend market? DVY, the $15B behemoth in the space, is a good choice. Do you want a fund that only buys the most stalwart dividend payers? SDY, which requires 25 consecutive years of dividend payouts, fits the bill (although its stringency drives down yield). Like Technology? Try VYM. Health care? Either HDV or DHS. Low beta? High beta? Large-cap? Small-cap? The choice is yours, and differences drive performance.
While investors target this space first for yield, there is a major difference in total returns between the various funds: Over the past year, the difference between the best- and worst-performing funds in this segment was about 10%—a number greater than the difference in yields. While most of the funds trade well, holding costs differ radically, so long-term investors will want to ensure they really like the more expensive options. (Insight updated 02/17/17)

All Funds (14)

VYM $17.63 B 17628406268.72 cheap to own and trade

A 95
E
98
98
T
100
100
F
95
95

SCHD $5.12 B 5115844522.7506 low all in costs

A 88
E
100
100
T
99
99
F
88
88

DHS $1.29 B 1291459555 trades well

A 85
E
91
91
T
95
95
F
85
85

SDY $15.35 B 15353223084.623 screens for 20 years of rising dividends

A 78
E
93
93
T
99
99
F
78
78

HDV $6.53 B 6534618270 low all in costs

A 77
E
100
100
T
100
100
F
77
77

DVY $17.08 B 17082623925 Hugely popular

A 73
E
94
94
T
99
99
F
73
73

FDL $1.76 B 1764928557.21 higher holding costs but trades well

A 72
E
91
91
T
99
99
F
72
72

FVD $3.2 B 3202645661.108 high holding costs

B 76
E
82
82
T
98
98
F
76
76

PEY $1.13 B 1132483400 higher holding costs

B 64
E
88
88
T
96
96
F
64
64

RDIV $466.21 M 466208700 modest investor interest to date

B 44
E
85
85
T
96
96
F
44
44

DIV $379.86 M 379860657.11251 Low volatility overlay

B 39
E
83
83
T
89
89
F
39
39

ELKU $2.87 M 2865857.316 N/A

N/A 0
E
0
-1
T
0
-1
F
0
-1

WBIY $22.12 M 22122000 N/A

N/A 0
E
0
-1
T
0
-1
F
0
-1

VLML $10.23 M 10228504.5 new; trade with care

F 68
E
43
43
T
61
61
F
68
68

ETF.com Grade as 02/09/17

Equity: U.S. - High Dividend Yield

Performance Dispersion
Performance  [as of 02/16/17] 1 Month 3 Month YTD 1 Year 3 Years 5 Years 10 Years
Benchmark: MSCI USA IMI High Yield Dividend3.56%7.68%3.77%--12.06%14.36%8.34%
A 95.284078VYM17628406268.72VYMVanguard High Dividend Yield Index Fund2.56%6.96%2.55%24.25%11.47%13.94%7.22%
A 87.520215SCHD5115844522.7506SCHDSchwab US Dividend Equity ETF2.11%5.42%1.97%22.71%10.50%13.57%--
A 84.970297DHS1291459555DHSWisdomTree High Dividend Fund1.83%6.05%1.60%22.01%11.13%13.18%5.37%
A 77.973094SDY15353223084.623SDYSPDR S&P Dividend ETF2.33%6.13%2.84%24.35%12.14%14.32%7.68%
A 76.84035HDV6534618270HDViShares Core High Dividend ETF1.99%5.74%1.41%16.93%10.10%12.27%--
A 72.537093DVY17082623925DVYiShares Select Dividend ETF2.66%6.85%2.94%25.34%12.25%14.28%6.08%
A 72.068326FDL1764928557.21FDLFirst Trust Morningstar Dividend Leaders Index Fund3.34%8.01%3.47%22.66%13.23%14.40%5.77%
B 75.986313FVD3202645661.108FVDFirst Trust Value Line Dividend Index Fund2.56%6.91%3.00%23.70%13.26%14.41%8.15%
B 63.815699PEY1132483400PEYPowerShares High Yield Equity Dividend Achievers Portfolio1.17%7.08%1.53%36.28%17.48%16.93%4.73%
B 44.076015RDIV466208700RDIVOppenheimer Ultra Dividend Revenue ETF1.54%7.20%1.98%35.55%14.70%----
B 38.591779DIV379860657.11251DIVGlobal X SuperDividend US ETF0.86%7.38%3.22%18.16%5.14%----
N/A 0ELKU2865857.316ELKUElkhorn FTSE RAFI U.S. Equity Income ETF2.55%6.17%2.48%26.78%------
N/A 0WBIY22122000WBIYWBI Power Factor High Dividend ETF0.76%---0.61%--------
F 67.588087582932VLML10228504.5VLMLDirexion Value Line Mid- and Large-Cap High Dividend-3.31%2.61%----------
All returns over 1 year are annualized. All returns are total returns unless otherwise stated.

ETF.com Efficiency Insight

Costs matter in the high-dividend yield space. After all, if an investor is searching for yield, every penny paid in expenses is a penny lost on yield. And the costs here vary widely, fromFunds like VIG and VYM tend to cost even less than their headline fee SCHD's 0.07% to FVD’s and DIVC's 0.70%.
Real world holding costs—measured by our rolling one-year tracking differences—vary even more. Funds like VIG and VYM—cheap as they are—tend to cost even less than their headline fee, a remarkable feat. In contrast, FVD’s high-fee offering costs closer to 100 bps for a typical 1 year period. The bottom line for investors with longer time horizons is to check both the fee and the median tracking difference. Let small differences go, but large discrepancies in costs should factor into your long term allocation decision.
Asset levels also vary greatly in the segment. Investor interest in yield plays remains very strong. Roughly a half-dozen funds have more than $1B in AUM each, and no fund faces elevated closure risk.
All funds in the segment are tax efficient, removing another worry for investors. No fund in the segment has paid a capital gain in the past 3 years.
Overall, the segment offers a broad group of efficient funds, with their scores generally in proportion to their fees. (Insight updated 02/17/17)

All Funds (14)

98
98.308462
94
93.667832
93
92.900012
91
90.606072
91
90.506309
88
87.819618
85
85.449237
83
83.153676
82
81.789777
100
100
100
100
N/A
0
N/A
0
43
43.074787407848

ETF.com Grade as 02/09/17

Equity: U.S. - High Dividend Yield

Tracking Difference (12 Month)

Ticker Expense Ratio Median Max. Upside Max. Downside Max LT/ST Cap Gains Rate Rule Legal Structure Fund Closure Risk Efficiency
SDY SPDR S&P Dividend ETF 0.35% -0.45% -0.31% -0.57% 20.00% / 39.60% Low 92.900012
DHS WisdomTree High Dividend Fund 0.38% -0.48% -0.41% -0.74% 20.00% / 39.60% Low 90.506309
VYM Vanguard High Dividend Yield Index Fund 0.09% -0.09% -0.05% -0.13% 20.00% / 39.60% Low 98.308462
DIV Global X SuperDividend US ETF 0.45% -1.21% -0.23% -1.69% 20.00% / 39.60% Low 83.153676
ELKU Elkhorn FTSE RAFI U.S. Equity Income ETF 0.39% -- -- -- 20.00% / 39.60% High 0
DVY iShares Select Dividend ETF 0.39% -0.49% -0.41% -0.54% 20.00% / 39.60% Low 93.667832
WBIY WBI Power Factor High Dividend ETF 0.67% -- -- -- 20.00% / 39.60% Low 0
FDL First Trust Morningstar Dividend Leaders Index Fund 0.45% -0.63% -0.47% -0.75% 20.00% / 39.60% Low 90.606072
FVD First Trust Value Line Dividend Index Fund 0.70% -0.99% -0.68% -1.13% 20.00% / 39.60% Low 81.789777
HDV iShares Core High Dividend ETF 0.08% -0.12% -0.07% -0.14% 20.00% / 39.60% Low 100
PEY PowerShares High Yield Equity Dividend Achievers Portfolio 0.54% -0.62% -0.51% -0.73% 20.00% / 39.60% Low 87.819618
RDIV Oppenheimer Ultra Dividend Revenue ETF 0.39% -1.33% -0.75% -1.77% 20.00% / 39.60% Low 85.449237
SCHD Schwab US Dividend Equity ETF 0.07% -0.15% -0.10% -0.21% 20.00% / 39.60% Low 100
VLML Direxion Value Line Mid- and Large-Cap High Dividend -- -- -- 20.00% / 39.60% High 43.074787407848

ETF.com Tradability Insight

Almost all funds in the segment offer sufficient liquidity for retail and institutional investors. The liquid funds trade at spreads of 10 bps or tighter, and trade more than $1M mostActive traders can find the best on-screen liquidity in DVY, SDY, VIG and VYM days.

Active traders can find the best on-screen liquidity in DVY, SDY, VIG and VYM, all of which trade over $50 million a day with tiny spreads. HDV and SCHD aren’t too far behind the lead pack and offer ample liquidity for most investor needs.

The exceptions are PFM, RDIMV and DIVC. PFM trades more than $600K most days, at spreads of 13 bps, so most investors can get in and out fairly with some effort. RDIV has similar liquidity, which is to say workable but not great. DIVC lags the pack with wider spreads and anemic volume.

 (Insight updated 02/17/17)

All Funds (14)

100
99.666521
100
99.521726
99
99.441248
99
98.885276
99
98.685235
99
98.588223
98
98.442621
96
96.391241
96
95.800463
95
95.170246
89
88.568348
N/A
0
N/A
0
61
61.353201522939

ETF.com Grade as 02/09/17

Equity: U.S. - High Dividend Yield

Ticker Median Daily Volume ($) Average Spread Creation Unit/Day Market Hours Overlap Underlying Volume/Unit % Creation Cost Per Unit (%) Impediment to Creations Score - Tradability
VYM Vanguard High Dividend Yield Index Fund $81.33 M 0.01% 42.18 100.00% 0.01% 0.01% None 99.666521
ELKU Elkhorn FTSE RAFI U.S. Equity Income ETF $1.39 K 0.42% 0.00 100.00% 0.01% 0.03% None 0
WBIY WBI Power Factor High Dividend ETF $153.21 K 0.08% 0.13 100.00% 0.03% 0.04% None 0
DHS WisdomTree High Dividend Fund $3.21 M 0.15% 0.96 100.00% 0.01% 0.03% None 95.170246
DIV Global X SuperDividend US ETF $1.64 M 0.15% 1.33 100.00% 0.50% 0.06% None 88.568348
DVY iShares Select Dividend ETF $82.94 M 0.01% 18.69 100.00% 0.10% 0.01% None 98.685235
FDL First Trust Morningstar Dividend Leaders Index Fund $8.08 M 0.04% 5.77 100.00% 0.01% 0.04% None 98.588223
FVD First Trust Value Line Dividend Index Fund $18.34 M 0.04% 12.87 100.00% 0.02% 0.03% None 98.442621
HDV iShares Core High Dividend ETF $28.93 M 0.02% 7.01 100.00% 0.03% 0.01% None 99.521726
PEY PowerShares High Yield Equity Dividend Achievers Portfolio $5.86 M 0.08% 6.84 100.00% 0.06% 0.06% None 96.391241
RDIV Oppenheimer Ultra Dividend Revenue ETF $4.41 M 0.12% 2.53 100.00% 0.04% 0.03% None 95.800463
SCHD Schwab US Dividend Equity ETF $23.75 M 0.03% 10.96 100.00% 0.01% 0.01% None 99.441248
SDY SPDR S&P Dividend ETF $71.57 M 0.02% 16.40 100.00% 0.08% 0.01% None 98.885276
VLML Direxion Value Line Mid- and Large-Cap High Dividend $0 0.00 100.00% 0.04% 0.04% None 61.353201522939

ETF.com/ Block Liquidity

DHS
5
4
3
2
1
DVY
5
4
3
2
1
FDL
5
4
3
2
1
FVD
5
4
3
2
1
HDV
5
4
3
2
1
PEY
5
4
3
2
1
RDIV
5
4
3
2
1
SCHD
5
4
3
2
1
SDY
5
4
3
2
1
VYM
5
4
3
2
1
WBIY
5
4
3
2
1
DIV
5
4
3
2
1
ELKU
5
4
3
2
1
VLML
5
4
3
2
1

This measurement shows how easy it is to trade 25,000 shares of each ETF.

ETF.com Fit Insight

The funds in this segment provide a wide range of exposures, as evidenced by the 10% total return spread between the best- and worst-performing ETF in the segment over the pastDIV and RDIV show very high portfolio yields but differ radically from our benchmark year.
DVY focuses on firms that have a 5-year history of paying consistent, sustainable, and rising dividends, and weights firms by price. DVY’s portfolio has a smaller average market cap than most competing funds and carries one of the heaviest weightings to utilities firms—roughly 1/3 of the portfolio. DHS offers a broad portfolio with nearly 1,000 names (once one accounts for the ETFs it holds) with one of the more attractive yields in the segment. DHS has a much smaller stake in utilities, but overweights telecom and financials. Investors who like the health care and telecom sectors can amplify that exposure further with HDV, which has strong yield and takes huge positions in mega-cap stocks like AT&T and J&J.
The two PowerShares funds have very different exposures thanks to two very different approaches. PEY holds the 50 highest-yielding companies in its selection universe with 10 years of increasing dividends, which causes it to tilt small, but also boosts its yield. PFM, meanwhile, has a larger basket that favors larger firms and carries a much lower yield. The two funds also differ in their sector concentrations, with PEY focused on utilities and financials and PFM focused on energy and consumer stocks.
First Trust also offers two very different funds in FVD and FDL. FVD equally weights its portfolio of about 200 holdings, using the Value Line proprietary dividend safety model to screen firms. FDL’s market-cap-weighted portfolio offers the higher yield thanks to a concentrated portfolio that has huge positions in the largest dividend-paying firms in the country, like AT&T and Chevron. This leads to big overweights to utilities and telecom firms.
SDY and VIG, two of the segment’s most popular funds, further highlight how different yield-hungry investors are. VIG tilts nearly twice as large, and carries less yield as it focuses on dividend appreciation, which gives it’s a growthier feel. SDY overweights financials and materials, while VIG gives industrial and consumer stocks big bumps.
VYM offers one of the broader portfolios in the segment, with very few sector bets and a yield that is roughly equal to our benchmark. HDV carries the greatest health care exposure of the group along with a large overweighting to telecom firms. SCHD underweights financials significantly, but allocates the difference to consumer non-cyclicals. Newer entrants DIV and RDIV show very high portfolio yields but differ radically from our benchmark. DIVC, another new offering, takes the opposite approach by foregoing yield altogether and focusing instead on the long term growth prospects of high dividend payers. (Insight updated 02/17/17)

All Funds (14)

95
95.284078
88
87.520215
85
84.970297
78
77.973094
77
76.84035
76
75.986313
73
72.537093
72
72.068326
64
63.815699
44
44.076015
39
38.591779
N/A
0
N/A
0
68
67.588087582932

ETF.com Grade as 02/09/17

Equity: U.S. - High Dividend Yield