High Yield Dividend ETFs Take Different Paths to Income

Core Insights - The S&P High Yield Dividend Aristocrats Index has expanded to 155 holdings, adding eight companies that have raised dividends for at least 20 consecutive years [1] - The State Street SPDR S&P Dividend ETF (SDY) and the ALPS Sector Dividend Dogs ETF (SDOG) have shown different performance metrics over the past year, with SDY returning 10.7% year-to-date and 18.5% over one year, while SDOG returned 11.1% year-to-date and 20.3% over the same period [1] Fund Performance - SDY focuses on companies with a long history of dividend growth, while SDOG selects the five highest-yielding stocks from each of 10 sectors [1] - SDY includes 102 stocks from the S&P 500, 38 from the S&P MidCap 400, and 15 from the S&P SmallCap 600, with a current yield of 2.60% and annual expenses of 0.35% [1] - SDOG maintains equal weightings across sectors, with a yield of 4.03% and annual expenses of 0.36% [1] Sector Exposure - Energy stocks have gained 19.9% year-to-date, while technology stocks have fallen by 2.7%, contributing to the performance gap between SDY and SDOG [1] - SDOG's balanced approach allows it to benefit from energy sector gains, holding stocks like Chevron Corp. and ConocoPhillips, while SDY has heavier weightings in industrials, consumer staples, and utilities [1] - Among SDY constituents, approximately 33% have raised dividends for 20 to 24 years, and 32% have done so for 45 years or more [1]