Eggs in a basket

Concentration Concerns in Equity Income Solutions

Dividends have historically served as a primary source of return for equity holders. Equity allocations can provide a meaningful source of income, leading to a spectrum of equity income strategies. However, many of these income strategies suffer from a single-minded focus on generating the highest yield, without necessarily looking at the consequences of portfolio concentrations at the security or sector levels. We examine concentration in three popular, dividend-focused indexes, the Dow Jones U.S. Dividend Select Index (Dividend Select), the S&P® High Yield Dividend Aristocrats Index (High Yield Aristocrats) and the NASDAQ U.S. Dividend Achievers Select Index (Achievers Select). While we use only three indexes as examples, we believe similar observations can be made regarding concentration in many of the active equity income strategies.
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Tim Atwill
Tim Atwill, Ph.D., CFA

Head of Investment Strategy

 

 

Tim Atwill
Tim Atwill, Ph.D., CFA
Alex Paulsen

Alex Paulsen

Director – Investment Strategy

 

Alex Paulsen

Alex Paulsen

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