The WSJ’s Tom Lauricella is predicting that Anxious Investors May Turn to Funds Focused on Dividends.
The logic is straightforward. After a terrible year for equities, investors will be gun shy and will only be looking for stocks with solid balance sheets and reliable cash flow paid out as dividends.
Mutual funds that focus on dividend paying stocks are expensive, opaque and tax-inefficient. So dividend ETFs are the answer.
Lauricella suggests considering the iShares Dow Jones Select Dividend Index Fund (DVY). The $3.6 billion fund concentrates in financials (43%), utilities (19%) and consumer goods (12%).