Some sectors are hot, while others are not. For example, big
banks such asJPMorgan Chase (
), Goldman Sachs (
) andBank of America (
) are still well off their peaks from 2007 and 2008.
For income investors who don't want volatility due to exposure
to sovereign debt, loan losses or regulatory issues in the
financial sector, there's theWisdomTree Dividend ex-Financial (
) exchange traded fund.
The ETF tracks an index that goes by the same name and tracks
the performance of domestic dividend-paying stocks, excluding
"It can serve as a hedge against further financial sector
volatility while focusing on a set of stocks that we believe
display attractive dividend characteristics for the current
market environment," WisdomTree's Director of Research Jeremy
Schwartz and Research Analyst Christopher Gannatti wrote in a
The ETF is rated four out of five stars by Morningstar. It has
a beta of 0.77, meaning that it has lower volatility than a
market proxy such as the S&P 500. A beta greater than 1.0
equals more volatility than the market.
Based on its latest four quarterly distributions, the ETF has
a yield of 3.5% compared to about 2.5% for the S&P 500.
The ETF has climbed 4% so far this year and has been
consolidating moderately since April.
Nearly 14% of the ETF's assets are in utilities. Consumer
staples also make up about 14%, while materials account for an
The fund has some stocks with low IBD Ratings such asFrontier
) and Southern Copper (SCCO). But these have big dividend yields
of 10% and 6.5%, respectively.
Some stocks with better IBD Ratings are in the ETF, too.
Verizon Communications (VZ) is near its best levels in more
than 10 years. The stock is up about 12% from a 44 buy point in a
double-bottom base. Fellow telecom giant AT&T (T)is at a
four-year high. It cleared a 32.07 buy point from a
cup-with-handle base in April.
Tobacco makerAltria Group (MO) is trading near an all-time
high after clearing a 32.72 buy point from a shallow base last