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Consider Dividend ETFs in an Inflationary Market


Investors who are worried about inflation should consider dividend exchange traded fund strategies.
Both the consumer-price index and the producer-price index have increased faster than expected, weighing on broad swathes of both the equity and fixed income markets and contributing to the heightened volatility in recent weeks. Many fear that high inflation will force the Federal Reserve to cut back on its accommodative momentary policies and hike interest rates sooner rather than later. With higher rates, the current value of future profits is reduced, which drags on stock valuations.
However, dividend-paying stocks have outperformed non-dividend payers as traders adjust to a potentially rising inflation environment. According to Evercore data, there is a close correlation over the last decade between inflation expectations, the 10-year Treasury yield, and the relative performance of high-dividend stocks, Barron’s reported. ....

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Australian banks, led by CBA, set to return record $15 bln cash to investors


Paulina Duran
5 minute read
A Commonwealth Bank of Australia logo adorns the wall of a branch in Sydney, Australia, May 8, 2017. REUTERS/David Gray
Australia s big banks are likely to return a record $15 billion or more of cash to investors over the next two years, with investors betting Commonwealth Bank (CBA.AX) will move first and helping drive shares of the top lender to all-time highs.
Commonwealth Bank and its smaller rivals Australia and New Zealand Banking Group (ANZ.AX), National Australia Bank (NAB.AX) and Westpac Banking Corp (WBC.AX) have made a remarkable comeback, from being shamed in a public inquiry and shunned by investors three years ago to being sought-after investments now. ....

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Low Yields? Not with This Superdividend ETF


May 28, 2021
Lackluster yields in today’s fixed income environment are pointing advisors toward a fund that can search the globe for the best yields. Enter the
A global economic recovery should provide additional tailwinds for dividend-producing equities.
“What has very quietly happened is dividends have outperformed the S&P on an annualized basis by just as much as growth outperformed value in the prior year,” said Steve Chiavarone, portfolio manager at Federated Hermes. “This is a story that has a lot of legs.”
“An instrument that pays a regular payment, whether that’s a coupon bond or a dividend-paying stock, has a shorter duration than a growth stock or a noncoupon-paying bond, and in an environment of rising rates, you want to be shorter duration,” said Chiavarone. “This is our highest conviction call. We think dividends have a long way to run here.” ....

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