Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
@Kaspa - I'm trying to think of any reason(s) for investing in HDV. However, it concerns me when this portfolio pays out a dividend of only 3.06% while 17 of their top 25 holdings yield more than, or equal to in one instance, that on their own. 7 of the 25 are a full percentage point or more above the combined stated yield with 3 of those contained within their top ten holdings.
Granted, there's an advantage to monitoring only one holding and you only have one set of transaction costs versus 25 so that helps. You also get some diversification across sectors but where is the rest of the yield going? I also think that the ER could be cut at least by half and they'd still do alright.
You make good points and I am slowly transitioning to individual stocks for the same reason. With a similar idea, I had posed a question on this forum about how to mine good low-turnover funds/ETFs for stock ideas. The challenge is how to deal with built-in gains from tax perspective, which is why new money is going to dividend stocks.
I've found the ebb and flow of divi payers to be very interesting...they really served as leaders in 2011, and also this year..especially the REITs. We shall see what happens when rates rise, but for me, the divi is where the focus lies.
Comments
Granted, there's an advantage to monitoring only one holding and you only have one set of transaction costs versus 25 so that helps. You also get some diversification across sectors but where is the rest of the yield going? I also think that the ER could be cut at least by half and they'd still do alright.