This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Dividend ETF Off to Rousing Start

Stocks in this article: DVY SDY HDV

NEW YORK ( TheStreet) -- Both the iShares Dow Jones Select Dividend Index Fund (DVY) and SPDR S&P Dividend ETF (SDY) appear set to kick off the New Year on a strong note.

In the face of the seemingly persistent doom and gloom that plagued the latter half of 2011, the two funds have managed to handedly outpace broad-based ETFs like the SPDR S&P 500 ETF (SPY).

The real winner in the realm of dividend ETFs, however, has been the iShares Dow Jones High Yield Equity Fund (HDV). The new kid on the block, HDV powered past its veteran competitors, securing over 7% gains during the past six-month period. This was not an unusual occurrence for the fund, though.

Since its late-march unveiling, HDV has consistently trumped DVY and SDY. With this type of standout strength, came popularity. The fund's average trading volume currently stands at over 220,000.

HDV appears to have already cemented its place within the ETF universe. Now as we prepare to kick off 2012, the question remains: Will the fund maintain its lead in the New Year?

In order to answer to this question, one needs to look under the fund's hood. By uncovering the factors that separate HDV from its competitors, it becomes easier to see what has, and could continue to contribute to its remarkable divergence.

Upon initial inspection it becomes clear that HDV is very different from the elder DVY. In terms of style, the younger fund leans solidly into the large-cap category. In fact, according to Morningstar's style box, HDV can be seen flirting with a giant-cap designation.

DVY, though officially considered a large cap product, toes the line between a large- and mid-cap classification.

During periods of market euphoria, smaller and more-volatile companies like those comprising DVY tend to fall into favor as increasingly confident investors seek out upside potential.

In tumultuous environments, on the other hand, these same companies often lag as individuals flee from risk. In the event that the turmoil that defined 2011 persists into the New Year, HDV's dedication to stable large- and mega-cap companies will likely help the fund continue to outperform.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs