A Dividend ETF That Could Help Recover Your Losses

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.

The last exchange-traded fund (ETF) recommendation in this series for income and dividend-focused investors is the iShares Select Dividend ETF (DVY). DVY is a big player in the land of dividend-focused ETFs, as it gives investors exposure to the biggest and arguably the best dividend-paying stocks in the market today.

View the current price, volume, performance and top 10 holdings of DVY at ETFU.com.

As financial markets struggle to make headway of any sort, dividends are gaining appeal among investors as an alternative way to generate income. DVY tracks the Dow Jones U.S. Select Dividend Index, which is a compilation of broad-cap U.S. companies that are known for their fairly high payouts. In addition, DVY offers exposure to 100 companies that have paid out dividends for at least five years.

Although DVY was down some 5% in 2015 and has lost 3% so far in 2016, the fund’s losses have been far less substantial than some of the double-digit percentage hits many sectors and companies are reporting. This is likely because DVY has significant exposure to both the utilities and consumer staples sectors (35.32% and 12.82%, respectively), which are generally two of the more stable areas of the market. In addition, DVY’s dividend yield sits at a solid 3.5%, with $13 billion in assets managed and an expense ratio of 0.39%.


While DVY’s total assets are largely invested in positions in the dividend index it tracks, individual holdings are quite small, measuring no more than around 4% each. The fund’s most significant holdings include big-name companies such as Lockheed Martin (LMT), 4.09%; Philip Morris (PM), 2.84%; McDonald’s (MCD), 2.56%; and Clorox (CLX), 2.21%.

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If exposure to high-paying dividend stocks seems like a good way to recover your hard-earned capital right now, the iShares Select Dividend ETF (DVY) could a good first step toward that goal.

Remember to look for the current price, volume, performance and top 10 holdings of DVY at ETFU.com.

Stay tuned for next week, where I will present my first ETF pick in a series aimed at growth-oriented investors!

If you want my advice about buying and selling specific ETFs, including appropriate exit points, please consider subscribing to my Successful ETF Investing newsletter.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

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