SDOG ETF Marks 14 Years With 3.48% Yield

The ALPS Sector Dividend Dogs ETF (SDOG) marked its 14th anniversary on June 29. The fund reported a trailing 12-month dividend yield of 3.48%, year-to-date gains above 15% and about $1.32 billion in assets under management.

SDOG applies an equal-weight, sector-based methodology. It selects higher-yielding stocks within each sector and rebalances periodically to maintain equal sector weights, leaving the fund underweight in technology and overweight in utilities and consumer staples.

That sector mix has contributed to the fund’s income profile and coincided with its gains this year, during a period when investors shifted away from high-growth technology stocks. Many holdings in the portfolio have multi-year or multi-decade streaks of dividend increases.

Kirsten Cabacungan, an investment strategist at the chief investment office for Merrill and Bank of America Private Bank, commented: “Companies that have consistently increased their dividends tend to be more stable, higher-quality businesses, which historically have weathered downturns and are more likely to have the ability to pay dividends consistently.”

Merrill recommends that investors seeking immediate income may favor stocks with above-average yields, while investors focused on dividend growth may prefer companies with a record of raising payouts as cash flows and profits grow.

Dividends are not guaranteed. Companies can cut or suspend payouts, and an ETF cannot fully protect investors from negative dividend actions.

VettaFi LLC provides the index for SDOG and receives an index licensing fee. VettaFi does not issue, sponsor, or sell the ETF and has no responsibility for its management or trading. The fund is presented to investors as offering above-average yield and exposure to companies with histories of raising dividends.