Journal Of Indexes: Dividends Vs. Value

March 13, 2014

 

Dividend Indexes And Value Indexes

Dividend Indexes And Value Indexes

Dividend Indexes And Value Indexes

While the dividend index is clearly more volatile and shows an overall outperformance, this is not an indicator for any specific bias in the stock selection. Correlation suggests a much closer relationship between the value index and the base index, but this is primarily due to the alternative weighting scheme employed by the dividend index and, hence is not of particular relevance for this analysis.

To draw a conclusion about the results of the selection methods, we turn our attention to the characteristics of the components that the algorithms have selected. We will look at each of the portfolios from the perspective of each of the key selection variables and fundamentals. It is important to note that here we are actually looking at the distribution of the results across the selected components in order to evaluate the stock selection capabilities of each respective strategy.

 

 

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