Futu Research | ETF Investment Research
【High Dividend ETF】A good investment is not only a high dividend, but also growth
On the other hand, the global recession has become a nightmare, and the United States will suffer from a global slowdown in the coming months. During the downturn, higher dividends were driven by other unique earnings gains. Under a low interest rate environment, high-yield ETFs can still provide investors with a defined Cash/Money Market and similar healthy returns, which can be the equivalent of a trading cycle.
with $Spdr Series Trust Spdr Portfolio S&P 500 High Dividend Etf(SPYD.US)$For example, the Funds track the High Yield Index, which brings together companies that have increased dividends every year for more than 25 years. As you can see, SPDY's shares are $SPDR S&P 500 ETF(SPY.US)$THE MAGNITUDE OF VARIATION IS BASICALLY THE SAME, AND IT IS BETTER TO SEE $iShares 20+ Year Treasury Bond ETF(TLT.US)$AND SPDY'S YIELD IS 4.59%, FAR HIGHER THAN SPY'S 1.28%.
Why do high-dividend assets have a money-making effect during a declining interest rate cycle?
First, the discount rate decreases and the value of high-yield products increases
At present, the market's bearish outlook has been delayed in order to slow down the market, and use the bearish policy to maintain the steady growth. The decline of the usual partners' policies has been undermined, market volatility has increased, investors have favored gains, and higher demand is expected to return. On the downside, the stock market's entire valuation level is moving higher.
At the same time, financial institutions commonly use the current value of the Cash/Money Market (DCF model) value of the value derived from the DCF model, while the core calculates the value before the cash flow is calculated, and the formula is that of the value = Uncoming Cash/Money Flow/( 1+discount rate) ^hour discount Rate=Profitability Rate+Percentage Ratio. Decrease, decrease in interest rates, correspond to lower rates of decline in the DCF model. Deceleration Decreases Increase in the value of the incoming Cash Flow, which means that the same Cash Flow will depreciate at a lower discount rate. Market appreciation is due to this increase. If you use earnings as an indicator of earnings tracking, similar to other companies with less information, the scale of the increase in value may be more significant.
Second, the spread is wider, and the income has a comparative advantage
In the periodic interval of the decline, the most direct decrease corresponds to the decrease in the profit margin of the entire market. The rate of return on investment tools is gradually decreasing, and the return on investment tools has decreased significantly. At this time, stocks that can offer similarly high dividends will make the difference between the interest rates higher. The demand for these Stocks has been pushed higher by investors who are looking for earnings. The previous SPYD profit margin was 4.49%, the share yield was already higher than the US$3.01% for the year 2012, and the profit margin was higher than 16.74% for the previous year, demonstrating the strategic value of the long-term configuration.
In summary, the attractiveness of high-dividend products and the market performance of high-yield products can be boosted by rising valuations, making them an option for investors.
So, how should we choose high-dividend products?
At the heart of high shares is the sustainability of the stock market, and the Cash/Money Market, which requires a very strong trading platform. In terms of sporting goods, companies with the following items are quite good:
1. The share ratio of listed companies in all sectors is comparable to the growth rate of all listed companies in 2023. Coal, Mining, Petrochemical, Household Appliances, and Transportation are the top five lines with the highest percentages.
2. According to the definition, the number of waves is small, the best growth of the company Cash/Money Market is similar to the growth rate, the production method is similar to the maturity, the need for new workers, new technologies, and the introduction of new investments, because the storage requirements for the provision of distributed earnings are not so high, there is less capacity and less strength. HIGH DIVIDEND RATIO.
3. The best way to judge whether a company is happy to conduct shareholder returns is to look at its historical data. Generally speaking, a company's operational regulation is linked to making it more credible for a company to carry out a fixed annual revaluation.
4. Profit growth is dependent on difficult company times. It is not possible to rely only on high dividend ratios, but it is important to look at the company's profit indicators (EPS per share, whether EPS is growing for years or for people to less. If a company's high dividend yield does not fall, it is possible that a poor dividend will persist.
The above is a general selection of high-dividend stocks. Although everyone needs to analyze the specific issues when making investment choices, it is important to take care of multidimensional indicators such as comprehensive financial statements, historical data, and make careful investment decisions.
(Joe): Currently, the Futubull APP already has a share sharing feature, and companies can use the top left corner of the page to tap into the shareholder page to challenge their own high-yielding products.
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HIGH DIVIDENDS ON INVESTMENTS OTHER THAN EQUITIESETFIt's also a nice choice
There are high-yielding companies that have a lot of returning shareholders on the market, but in the words of investors who don't want to buy stocks, there is a more defined, safe way to invest in stocks — high-yield ETFs. It is worth noting that investors in the US market share ETF will earn only 10% of profits, while investors in Hong Kong and Singapore need 30% of profits.
High Yield ETF (Dividend ETF), primarily for Cash/Money Market Dividend Distribution, sets the constituent shares of ETFs, and determines the weight of the shares held. Stocks that are tracked by different products can be dispersed, and the hedged type investors are looking for in the words of investors who are looking for is a very difficult product.
Below, we've sifted through the factors to select a few of the most mainstream high-dividend tracking ETFs on the U.S. equity market, and list their core metrics for comparison:
Based on the above table, a review of historical data, combining dividend yield and price margin. The three ETFs that have performed well over the past five years are SCHD, VYM and DVY. Below we will focus on these three products:
1. $Schwab US Dividend Equity ETF(SCHD.US)$
SCHD tracks the US Equity 100 Index, which focuses on large-cap companies in the US market with a strong stock market history and high long-term earnings, with a share ratio of 3.45%, down from a five-year high of 82.47%.
The ETF refers to high-volume US stocks with less volatility than New York Stock or Small-Cap Stocks, and creates an investment mix that is based on the underlying dividend stocks. Other Stocks tracked are mainly distributed in the Financial Services, Health, Disaster Prevention, and Employment sectors, including companies in various sectors such as Texas Instruments, Security, and Financial Services. Companies that can qualify for this Index usually have significant losses that can be obtained through the cities and towns, and some companies have a low operating performance in the form of a lower interest rate, and they are determined to return to shareholders' equity, which is more profitable during the lower interest rate cycle. AT THE SAME TIME, THE LEVERAGE RATIO OF SCHD WAS 0.06%, LOWER THAN THE AVERAGE ETF MARKET SHARE OF 0.48%, COMPARED WITH THE AVERAGE ETF MARKET SHARE, WITH A LARGE BENEFIT IN THE LOWER ENERGY MARKET.
2. $Vanguard High Dividend Yield ETF(VYM.US)$
VYM is tracked by the FTSE High Dividend Yield Index, which is made up of US large-cap stocks with a higher than average long-term dividend yield ratio. It had a loss of 0.05%, a dividend yield of 2.88%, and a five-year loss of 65.5%.
This includes stocks with a history of dividend payments, excluding Real Estate Investment Trusts and companies with an uncertain outlook, with high dispersion rates in various sectors, Part-time Public Sector Companies and Technology Companies, and Fire Protection Stocks. In the face of the prevailing urban environment, Technology companies can maintain a high market performance by using less money, lower interest rates, and the maintenance of labor resources can be used to make a big Cash/Money Market return. IT IS NOTEWORTHY THAT ONLY ETFS HAVE A 10-POINT SPREAD, WITH THE MAXIMUM HOLDING NOT EXCEEDING 3.6%, AND THE PREVIOUS TEN HOLDING YIELDS 23.46%, WHICH IS MORE RESISTANT TO MISALIGNMENT.
3. $Ishares Select Dividend ETF(DVY.US)$
DVY tracks the Dow Jones U.S. Select Dividend Index, which includes the 100 stocks with the highest dividend yield on the U.S. market. These large shares, which are highly distributed, are good for investors who prefer the specificity and transparency of the United States. It had a loss of 0.38%, a yield of 3.66%, and a five-year loss of 53.99%.
In this context, utilities and financial services stocks outweighed more than one-half, while the market's growth in Technology stocks followed a similar general trend. BUT IN THE DOWNTURN PERIOD, THE COMPANY'S PUBLIC UTILITY CYCLE, AND THE LOSS OF VULNERABLE COMPANIES, THE ETF HAS SHOWN AN UNSATISFACTORY PERFORMANCE. The management percentage of these companies was only 0.38%, slightly lower than the average ETF ratio of the market.
Risk Warning
With the dual objective of pursuing stable returns and diving for capital appreciation, the US High Dividend ETF provides investors with an ideal tool to effectively spread risk and generate passive income, making it a good choice for those who seek income while willing to sacrifice some of the most capable investors. Nevertheless, investors should be wary of the following risks:
1. High-yield ETFs, while dispersing equity risks, still face risks from the overall market.
2. The ETF management team's decisions and actions may not be fully in the best interests of investors, and issues such as poor management quality, tracking errors, lack of transparency can lead to loss or poor performance. Investors need to pay attention to these factors in order to choose the right ETF and conduct effective risk management.
Excluding high-dividend ETFs, in the previous article, I will introduce you to the big companies in the USA and Real Estate Trust Funds:
Futu Research | Short-term growth rate, which can be used in other US-based ETFs
They are also quality investment products in anticipation of falling interest rates, and everyone can vote according to their preferences.
