The AAM S&P 500 High Dividend Value ETF (SPDV, Financial) announced a monthly dividend of 3.894 cents on Nov. 1, payable on Nov. 6. The exchange-traded fund reported a monthly total decline of 5.61% in October, resulting in a year-to-date total return of 1.21%. In 2018, the ETF continues to be a top income choice for investors as dividend companies weather the market’s bearish swings slightly better than the market at large.
October equities
October was a brutal month for equities, with many indexes reporting bear market signals and correction-territory returns. For the month, the Nasdaq Composite Index was down 9.1%, the S&P 500 Index reported a loss of 7.3% and the Dow Jones Industrial Average fell 5.8%.
Dividend value stocks faired somewhat better during the turbulent month. SPDV’s benchmark S&P 500 Dividend and Free Cash Flow Yield Index reported a loss of 5.84% and the Dow Jones US Select Dividend Index was down 4.3%.
SPDV
Year to date, SPDV remains one of the best-performing funds for investors focused on large-cap income. Launched in November 2017, the ETF is a relatively new income-focused option. It seeks to replicate the S&P Dividend and Free Cash Flow Yield Index created in conjunction with the ETF’s launch. As a smart beta index, the ETF has been successful through the use of a customized smart beta indexing methodology that uses quantitative analysis to screen for the S&P 500 stocks with the best dividend and free cash flow attributes.
In October, SPDV reported a monthly total loss of 5.61% as equities experienced a market-wide correction with risk-off trading and global trade uncertainty causing declining valuations. Year to date, SPDV has a total return of 1.21%, outperforming its other S&P 500 high dividend peers.
Source: Morningstar
As of October 31, top holdings in the ETF included the following:
Source: S&P 500 with GICS sectors
SPDV Dividend
SPDV pays a monthly dividend around the fifth of each month.The ETF now has an average dividend of 6.48 cents in 2018. Using historical averages, this gives the fund a trailing 12-month dividend yield of 3.01%. Its forward dividend yield with the November dividend payment is now 1.79%.
SPDV advantage
SPDV offers investors a customized portfolio of top dividend-paying stocks in the S&P 500 at a low expense ratio of 29 basis points. Its smart beta methodology using both dividend and free cash flow attributes to identify portfolio holdings has made it one of the most successful large-cap equity income funds in the market in 2018.
Disclosure: I own shares of SPDV.
