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Dividend Yield Combinations

Enhancing Dividend Yield

Nicolas Rabener
10 min read
1 Mar 2018

SUMMARY

  • Buying high yielding and selling low yielding stocks is not an attractive strategy
  • Combining Dividend Yield with Quality & Growth factors improves the performance
  • Interestingly Dividend Growth adds relatively little value

INTRODUCTION

According to MorningStar assets under management of smart beta products breached $1 trillion in 2017 and more than half of the assets were invested in just three factors: Value, Growth and Dividend Yield. Naturally there is a significant amount of empirical evidence that suggests Value stocks generate positive excess returns across time, but much less evidence for the latter two factors. We published a research note in 2017 – Resist the Siren Call of High Dividend Yields

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