Lesson of the Year #8 - Investors Really Do Hide In Dividends

by Jay Pestrichelli on December 27th, 2011

Guess what? Investors really do run to dividends when things get rough. No surprise that ETFs that represent the staples and utilities outperformed this year. Look at the XLP and XLU with their 2.7% and 3.9% dividend rates. There are also ETFs focused on dividends like DVY (3.5%) and VIG (2.2%) that have outperformed as well.

Its worth noting that this was not the case for the entire year, though. The outperformance began when the markets got the jitters in August.
This run has accelerated in days of late with the XLU and XLP hitting their annual high on Friday December 23rd. Is this an indication that money managers are bracing for a choppy January? Or is it investors chasing performance? Either way, its clear that the trend is rising and if being diversified in these sectors has paid off…in more ways than one.


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