ALPS Sector Dividend Dogs ETF (SDOG)
Fund Objective: Seeks investment results that replicate as closely as possible, before fees and expenses, the performance of the S-Network® Sector Dividend Dogs Index (SDOGX).
The strategy provides an annual reconstitution of the five highest yielding securities in each of the 10 GICS sectors (ex Real Estate) with a starting universe of the 500 largest US stocks.
High Dividend Yield Relative to the US Large Cap Dividend Indices
Simple yield screen ensures that the portfolio will add securities whose yield has increased and remove those securities whose yield has fallen relative to the sector average.
‘Dogs Theory’
Screen generally results in adding securities whose prices have significantly trailed the average return for their respective sector. ‘Dogs Theory’ suggests that these companies may be closer to the bottom of their business cycle and are likely to see their price appreciate faster relative to their lower yielding peers.
Diversification
Isolating screen on a sector-by-sector basis ensures portfolio will have equal sector allocation rather than creating a selection bias to higher yielding sectors.
