ALPS Sector Dividend Dogs ETF

SDOG

Market cap $1.31B

The ALPS Sector Dividend Dogs ETF (SDOG) completed its annual rebalance this month, refreshing 28% of its portfolio by swapping 14 stocks for 14 new names. The $1.26 billion fund removed holdings including Exxon Mobil Corp. (XOM), McDonald's Corp. (MCD) and Philip Morris International Inc. (PM) while adding Starbucks Corp. (SBUX), Target Corp.

In the world of exchange-traded funds, some investors tend to look at index-based ETFs as static alternatives to the more flexible active funds. However, that is not necessarily the case.

The ALPS Sector Dividend Dogs ETF (SDOG) applies a classic income strategy across the market by selecting the highest-yielding stocks in each sector, offering investors a way to capture dividends without concentrating in traditional income-heavy areas like utilities or real estate. According to ETF Database, SDOG holds $1.25 billion in assets and has returned 10.

High-yielding stocks get a lot of attention. But a lot of them have underperformed over the long run. Which are better? High yielders or dividend growth stocks?

Sometimes where you invest matters more than how you invest, and two dividend dogs funds from ALPS highlight the trend. The ALPS International Sector Dividend Dogs ETF (IDOG) gained 33.4% year-to-date through November 2, far outpacing the 7.8% return from its domestic twin, the ALPS Sector Dividend Dogs ETF (SDOG), according to ETF Database data.

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ALPS Sector Dividend Dogs ETF is a passively managed ETF with a simple, high dividend yield-oriented strategy. As of writing, its DY stands at 3.8%. But high yield does little to bolster total returns: SDOG has underperformed both IVV and SCHD since inception, and meaningfully. While its low beta secured better performance amid the April sell-off, its YTD total return is still negative while the market is confidently in the green.

On this episode of the “ETF of the Week” podcast, VettaFi's Head of Research Todd Rosenbluth discussed the ALPS Sector Dividend Dogs ETF (SDOG) with Chuck Jaffe of Money Life. The pair discussed several topics related to the fund to give investors a deeper understanding of the ETF overall.

VettaFi's Head of Research Todd Rosenbluth discussed the ALPS Sector Dividend Dogs ETF (SDOG) on this week's “ETF of the Week” podcast with Chuck Jaffe of “Money Life.” VettaFi.com is owned by VettaFi LLC (“VettaFi”).

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