The problem with this ETF is the selection procedure according to which the shares are included in the underlying index.
As far as I know, the stocks are selected purely on the basis of dividend yield. It is generally known that this alone is useless as a criterion for selecting quality stocks and that other factors such as dividend growth, dividend history and payout ratio should definitely be taken into account.
And the ETF's performance reflects exactly that: a very high dividend yield and a very weak price performance (compared to conventional indices such as the S&P 500). This suggests that the index contains only a few quality stocks.
As far as I know, the stocks are selected purely on the basis of dividend yield. It is generally known that this alone is useless as a criterion for selecting quality stocks and that other factors such as dividend growth, dividend history and payout ratio should definitely be taken into account.
And the ETF's performance reflects exactly that: a very high dividend yield and a very weak price performance (compared to conventional indices such as the S&P 500). This suggests that the index contains only a few quality stocks.
••
@ChrisBizz OK thanks for the reply, I'll check how the first dividend payment goes. I am not highly invested :)
••