It is simple economics. The Federal Reserve's low interest
rate policy and plans to keep rates low through 2015 have chased
yield-hungry investors out of cash investments and into
higher-yielding products. ETF sponsors have met investors' yield
demands with aplomb, rolling out new
dividend-based products on a regular basis this
The impact of investors' dividend desires is obvious. Dividend
ETFs, new and old, have seen assets under management totals
surge. Thirty-two dividend ETFs tracked by Dorsey Wright &
Associates collectively grew assets by 40 percent through the end
of the third quarter compared to asset growth of 23 percent for
according to data provided by the firm
There are more than 32 dividend ETFs on the market today and
the Dorsey Wright data does not include funds such as the First
Trust Nasdaq Technology Dividend Index Fund (NYSE:
which debuted just two months ago
and already has $30.4 million in AUM.
It is also worth noting that inflows to dividend ETFs have not
been reserved for U.S.-focused funds. International payout funds
and emerging markets
have seen AUM totals surge as well.
With Europe's sovereign debt crisis and slowing emerging markets
growth on the minds of investors, many have opted for U.S.
equities over international equivalents. That has helped the
S&P 500 enjoy a double-digit year-to-date gain. It also means
investors have pumped plenty of cash into ETFs tracking U.S.
And those inflows have not been going just to the most
familiar products such as the Vanguard Dividend Appreciation ETF
) and the SPDR S&P Dividend ETF (NYSE:
), though those funds have grabbed their share of inflows. At the
end of 2011, VIG had $8.9 billion in AUM, but that number had
swelled to almost $11.9 billion at the end of the third quarter.
SDY has seen its AUM haul jump 14.6 percent since the end of
On a percentage basis among U.S. equity dividend ETFs, no fund
even comes close to the Schwab U.S. Dividend Equity ETF (NYSE:
), which has seen its AUM total nearly quadruple since the end of
2011. Give the ELEMENTS DJ High Yield Select 10 ETN (NYSE:
) some credit for trying to compete with SCHD in terms of asset
growth. The ETN has seen its assets more than triple this year,
according to Dorsey Wright data.
Other impressive 2012 asset growers include the iShares High
Dividend Equity Fund (NYSE:
), one of 2011's most successful ETF launches. HDV had less than
$920 million in AUM when the ball last dropped in Times Square.
As of the close of markets on Monday, the ETF had almost $2.3
billion in assets.
The Guggenheim Multi-Asset Income ETF (NYSE:
), the First Trust Morningstar Dividend Leaders Index Fund (NYSE:
) and the First Trust Value Line Dividend Index Fund (NYSE:
) also have seen stellar AUM growth.
As was noted earlier, investors have plenty of choices when it
comes to international dividend funds. The Global X Super
Dividend ETF (NYSE:
) is not a pure play global ETF as the U.S. accounts for almost
36 percent of SDIV's weight, but the real sources of allure here
are a 30-day SEC yield of 6.7 percent and a monthly dividend.
Dorsey Wright data indicate SDIV had just $29 million in AUM
at the end of 2011. That number is a now $154.5 million, meaning
SDIV's assets have
surged almost 55 percent in just two months
In terms of issuers, WisdomTree (NASDAQ:
) has seen an impressive, if under-appreciated burst of inflows
into its global dividend products this year. The WisdomTree
Emerging Markets Equity Income Fund's (NYSE:
) AUM total has more than doubled this year, representing another
feather in the cap of an ETF that
often outperforms rivals
such as the Vanguard MSCI Emerging Markets ETF (NYSE:
) and the iShares MSCI Emerging Markets Index Fund (NYSE:
Four other WisdomTree global dividend ETFs have seen asset
growth ranging from 20 percent to 31 percent this year, according
to Dorsey Wright. Those funds are the WisdomTree Australia
), the WisdomTree DEFA Equity Income Fund (NYSE:
), the WisdomTree Global Equity Income Fund (NYSE:
) and the WisdomTree International Div ex-Financials ETF (NYSE:
Do not forget small caps. The WisdomTree Emerging Markets
SmallCap Dividend Fund (NYSE:
) had $800 million in
AUM as of mid-February
. That number is now approaching $1.1 billion.
Despite Europe's woes, the First Trust STOXX European Select
Dividend Index Fund (NYSE:
) has seen its AUM total surge almost 64 percent this year. FDD
has a 30-day SEC yield of 6.53 percent. The Europe-heavy
Guggenheim International Multi-Asset Income ETF (NYSE:
) is fast approaching $117 million in AUM after finishing 2011
with just $86 million.
Emerging markets dividend ETFs
are not taking a backseat
to developed market rivals. The iShares Emerging Markets Dividend
Index Fund (NYSE:
) debuted in late February and already has $44.7 million in AUM.
That means DVYE has a long way to go to catch the SPDR S&P
Emerging Markets Dividend ETF (NYSE:
). With $315.3 million in assets, EDIV's AUM total has almost
doubled this year.
For more on dividend ETFs, click
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