NEW YORK (TheStreet) -- Finding ways to navigate the market's recent spurt of volatility has become increasingly difficult in recent days as precious metals have taken a hit and popular safe-haven currencies have run into steep headwinds.
Although some may be hesitant towards entering this market, I encourage investors to maintain a focus on alternative defensive asset classes.
One market shield that has continued to hold up relatively well has been dividend stocks. This is evidenced by the standout performance of the iShares Dow Jones Select Dividend Index ETF (DVY) vs. broad indices such as the S&P 500 and Dow Jones Industrial Average over the past three months.
DVY and the SPDR S&P Dividend ETF (SDY) have traditionally been the products I have encouraged investors to turn to in order to gain expansive exposure to the universe of dividend-paying equities.They are not alone, however. In recent months, fund companies have launched new products designed to provide investors with unique exposure to the universe of dividend-paying equities. They include the iShares High Dividend Equity Index Fund (HDV) and the Global X SuperDividend ETF (SDIV). Although these two newcomer funds are both designed to provide target yield-bearing stocks, they have witnessed a notable divergence during their first few months of trading. Unveiled in early April, the iShares High Dividend Equity Index Fund appears, on the surface, to be a carbon copy of the already-popular DVY. In fact, differs from its sister fund in various ways. For example, while DVY sets aside over one-third of its portfolio to the utilities sector, HDV places its largest bets on health care. HDV is also considerably more top-heavy than DVY. The fund's top 10 positions account for more than half of its portfolio. DVY's 10 largest positions, meanwhile, represent 22% of the fund. During the past three months, HDV's unique design has paid off. The fund has managed to outpace not only broad market indices but also DVY. Investors appear to have embraced this tweaked dividend ETF. During its opening months of trading it has managed to generate a substantial following, changing hands 130,000 times each day. On the other hand, the Global X SuperDividend ETF appears to be sputtering. Initially launched in June, SDIV is designed to track a pool of dividend-paying companies from around the globe. Developed nations including the U.S., Australia, and the U.K. represent the fund's largest geographic slices.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV