Comments on: Small-Cap Investment Choices for a Dividend Portfolio

By: Weekly Dividend Investing Roundup - November 23, 2007

Weekly Dividend Investing Roundup - November 23, 2007 — Fri, 23 Nov 2007 14:53:44 +0000

[...] has some dividend based ETF’s that may be worth a look. I looked at WisdomTree’s small-cap offering awhile [...]

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By: Troy R

Troy R — Sun, 14 Oct 2007 20:12:38 +0000

I see high yielding dividend funds as having some serious advantages. For starters you get all the advantages of both market anomalies, high yielding stocks AND small cap stocks. Second, almost by definition you are getting small cap value stocks when you get high yield. Really what you get is akin to a small cap ultra deep value stock. But why get “small cap mild yield” when you can have large yield for about the same expense costs? In terms of risk I see many advantages. Most of us are aware that dividends give a natural floor to the stock, they cushion abnormally steep declines. Second, I see high price volatility as a good thing for small cap high yielders because as the price swings I have more opportunities to reinvest my dividend at lower prices. The price oscillations allow me the opportunity to more deeply “compound” my dividend reinvestment thereby giving me more return on the upside. You might ask, ‘don’t the ups and downs cancel each other out?’ Good question and I don’t really know the answer. I’m working on testing that now but I have a hunch that volatility is a good thing for high yielders.

By: Troy R

Troy R — Sun, 14 Oct 2007 19:55:27 +0000

Here is another idea for small cap exposure without sacrificing dividends, PowerShares High Yield Dividend Achievers (ticker: PEY). This ETF is really 50% small to micro cap, 25% mid cap and 25% large cap. Its yielding a nice 4.11% for what amounts to a small cap portfolio. Its yield and small cap weighting are satisfying enough but even better is the 15 year “credit rating” you get with the Dividend Achievers Index. The down side is a oddly large .5% expense ratio. I see no reason why such a portfolio should have such large expenses.

By: Investing » Small-Cap Investment Choices for a Dividend Portfolio

Investing » Small-Cap Investment Choices for a Dividend Portfolio — Sun, 14 Oct 2007 16:46:10 +0000

[...] Sun wrote an interesting post today onHere’s a quick excerptThe funny thing about the low fee fund was that it required a $150000 minimum investment. The most expensive fund, available from Manulife Financial, has not beaten the Russell 2000 index once since its inception. … [...]