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ALPS Debuts 'Dividend Dogs' ETF

ALPS Debuts ‘Dividend Dogs’ ETF
June 29, 2012

Want more dividends? A new dividend focused ETF may be just the dog.


ALPS introduced the ALPS Sector Dividend Dogs ETF (NYSEArca: SDOG), an ETF that applies the ‘Dogs of the Dow Theory.’

“ALPS is thrilled to add a high-yield large-cap equity income ETF to our suite of portfolio solutions” said Tom Carter,
Executive Vice President of ALPS Holdings.

SDOG use the ‘Dogs of the Dow Theory’ equally across all ten sectors of the S&P 500 (NYSEArca: SPY). By mimicking the ‘Dogs’ theory to a wider universe, SDOG aims to include high yielding equities while also keeping sector and stock diversification. 

The “Dogs of the Dow” theory was popularized in the early 1990s. The strategy involves annually selecting and rebalancing into stocks within the Dow Jones Industrial Average (NYSEArca: DIA) whose dividend yield is the highest.

“We believe SDOG offers investors a product with attractive differentiatingfactors from other large-cap dividend ETFS including higher yield and sector diversification,” added Carter.

SDOG is linked to the S-Network Sector Dividend Dogs Index, a portfolio of 50 screened stocks from the S&P 500.  Each of the stocks is given an equal weight assignment within the index.

Here’s a quick snapshot of SDOG’s strategy:
 
• Selects dividend stocks from the S&P  500 Universe
• Dogs of the Dow theory applied to all ten sectors of the S&P 500
• Equal weight methodology at both the Sector and Stock level – 10% exposure to each sector and 2% exposure to each security
• Avoids over-concentration to high yielding sectors like financials and utilities

As of June 21, the yield for SDOG was 5.02% and the annual expense ratio is 0.40%.