The need for current income is also a factor in explaining the sudden popularity of large-company stocks. Dividends are an important component to overall return. Currently the Russell 1000 value ETF (IWD) boasts a dividend of 2.63%, 50 basis points larger than the small-cap Russell 2000 value offering (IWN). There are a number of large cap names that have dividends over 3%. This is much higher than can be earned at banks, and considering the Fed’s stance on keeping rates low for the foreseeable future, this isn’t likely to change.
Ben Warwick ([email protected]) is chief investment officer of Quantitative Equity Strategies LLC in Denver, and Memphis-based Sovereign Wealth Management, Inc.
See More of Ben Warwick’s Portfolio Gourmet Blog Post
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