Dividends Lure Investors to Large-Cap ETFs

Now that large-company stocks are paying higher yields than bonds, investors may be lured back to equities, according to Jeremy Schwartz, director of research at WisdomTree Investments.

Ten-year Treasuries are yielding 2.7%, while the SPDR S&P 500 ETF (SPY Quote), which tracks the S&P 500, has a yield of 3.1%. "When you have higher bond yields, there is less of a reason to go into stocks," Schwartz says. "From 1958 until 2008, the 10-year note sold at a higher yield than the market."

The WisdomTree LargeCap Dividend Fund (DLN Quote) is currently yielding 4.6%. Its top holdings include Bank of America (BAC Quote), Exxon Mobil (XOM Quote), General Electric (GE Quote) and Pfizer (PFE Quote). "In a way, this ETF is the S&P 500 of dividend-paying stocks," Schwartz says. ...