ETFs Without the Financial Headache
DTN has a distribution (trailing) yield of 3.45% versus 2% for SPY. DOO shows a distribution yield of 2.99% versus a trailing yield of 3.6% for EFA.
The concept of excluding the financial sector seems to have worked far better for domestic stocks than for foreign. In the case of DOO it is a dividend-weighted fund that based on information on the WisdomTree website yields less than the market cap-weighted EFA. Going forward this could change as could the yields for any of the funds, but the case for DOO looks weak for now. The reason for the lag to the iShares fund might not be attributable to the exclusion of financial stocks but due to the very heavy weighting to Europe.
This underscores the need to look under the hood and get the entire picture before buying a fund. The domestic fund has been working out as well as investors would probably hope but the international fund has had a more challenging go of things.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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