Jun 18th, 2009
What’s in My Portfolio: iShares Dow Jones Select Dividend Index
This is, surprise, not an individual stock in my portfolio nor in my Roth or tradional IRA; instead, it’s in my regular Sharebuilder brokerage account and it’s an exchange traded fund. It’s the iShares Dow Jones Select Dividend Index (DVY).
DVY is an ETF that tracks the Dow Jones U.S. Select Dividend Index–the point of this fund, for me, is that it pays dividends. And the yield shows that–it’s currently 6.08%. It also has a very reasonable price to earnings ratio of 11.99. Since an ETF is essentially a fund that trades like a stock, until I sell it, I have no capital gains issues to worry about; on the other hand, I am taxed on dividends, but fortunately, they have been at a preferred rate.
Unfortunately the performance for DVY has been poor as of late; for instance, as of this writing, its year to date performance is negative 23.11% compared to the virtually flat (but very slightly positive) performance of the S&P 500. That said, since its job in my portfolio is to churn out dividends, it’s been doing well enough that I’ll hold onto it (that and I don’t want to be exposed to the taxable capital gains that would generate).
I’m not sure if I would recommend this ETF for other people, but for someone interested in dividends it may be of interest. I’ll keep it for quite some time to come, but I sell very few of my holdings, particularly if they are not in a sheltered account.
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