![]() ![]() ![]() Index mutual funds need to sell securities, therefore triggering tax events. Lastly, the taxation of these two differ from one another, favoring ETFs. Or, in the case of the S&P 500 and the Dow Jones Industrial Average, less and more are about the same!Ĭomments provided are informational only, not individual investment advice or recommendations. Vanguard currently requires a 1,000 minimum for investing in a mutual fund, while you can buy an ETF from them for the cost of a single share. Sometimes in stock selection, less is more. When that is the task, keeping your focus on your personal end goal is the thing. It was about thinking through your investment research process. This article was not about what to invest in. But, this is only one part of your portfolio, after all. Sure, it lacks the fire-power of the full menu of FAANG stocks and such. But if you are a more established investor, who wants to participate in the stock market, but do so through individual stocks, the Dow offers a nice starting point. If you fashion yourself a whiz-kid stock investor who can identify that next super stock, then do your thing. I think that too many investors make stock-picking more complicated than it needs to be. Interactive Chart for SPDR S&P 500 ETF Trust (SPY), analyze all the data with a huge range. And, if you want to expand your range a bit, the 50 largest companies tend to track the overall S&P 500 quite closely as well. Overall, ETFs pulled in 6.2 billion in capital last week with U.S. What’s the shortcut? Well, since there are 30 stocks in the Dow, that’s a good place to start. CE-accredited research, education, and timely market commentary for financial advisors and wealth managers. However, if your focus is to get market-like returns or better, but do so by owning individual stocks instead of buying “the market,” trying to slice and dice through 500 stocks may not fit your time budget. If you aim to own an index fund for a long time, holding it but not selling it, there are scores of S&P 500-indexed funds you can own. How do we use this information? There are an infinite number of ways, but I want to focus on just one (you’re welcome!). My conclusion, based on the data: the Dow and the S&P 500 battle to a draw over the long-run. You can see it in the lower part of that chart. Alright then, we’ll call it a draw (with apologies to Monty Python and the Holy Grail)īut as we saw, outperformance of S&P 500 over Dow, or vice-versa, tends to run in cycles. In an environment where double-digit returns in the broad stock market have been common, this is somewhat notable. However, the widest gap either way is about 3-4% per year for 3 years. See this chart comparing the year-to-date performance of SCHD, SPY, DIA, and QQQ.The lower part of this chart says that the S&P 500 and Dow take turns winning versus each other. This performance has beaten the deeper corrections for SPY, QQQ, and DIA. So far this year, SCHD is -1.1% and never exceeded a 9% year-to-date decline. ![]() SCHD has a 2.83% quarterly dividend yield and has outperformed most of the other major dividend ETFs in 2022, with the exception of DVY. Vanguard Dividend Appreciation ETF ( VIG) attracted $432M. From March 23, 2020, to September 2, 2020, the Covid Crash Recovery Bull market, the 2X Long/Bull ETF, made a huge gain of 201 versus the S&P 500 of 55. iShares Select Dividend ETF ( DVY) attracted $1.1B. Vanguard High Dividend Yield Index ETF ( VYM) attracted $2.2B in 2022 so far. SCHD has attracted the same amount of fund flows as its three largest dividend ETF competitors combined. The Global X Dow 30 Covered Call ETF (DJIA) follows a covered call or buy-write strategy, in which the Fund buys the stocks in the Dow Jones Industrial. Of the three, DIA was the only fund to attract new investor capital, and that totaled $1.61B. QQQ, the fourth largest fund, has lost $2.39B. So far in 2022, $24B has exited SPY, the world’s largest ETF. The large influx of capital to SCHD has placed the fund in the top ten of inflow leaders in 2022, outdoing the benchmark SPDR S&P 500 Trust ETF ( NYSEARCA: SPY), SPDR Dow Jones Industrial Average ETF ( NYSEARCA: DIA), and the Invesco QQQ Trust ( NASDAQ: QQQ). This figure represented three times what the fund garnered in Q4 of 2021, when it drew $1.15B. SCHD, the world’s third-largest dividend ETF with $34.48B assets under management, has attracted $3.75B for what’s about to be the close of the first quarter. equity indices, as investors looked for stability amid a general slide in the overall stock market. Dividend Equity ETF ( NYSEARCA: SCHD) generated serious attention during Q1, pulling in more capital than funds tied to the three major U.S.
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