Eq: Large Cap

(New York)

“Cheap dividend” is a welcome phrase for many advisors. Income investments are precious, especially as clients age, but inexpensive and good-performing dividend funds are not quite as easy to find as one might expect. With that in mind, here are few names to consider: the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD), the Oppenheimer S&P Ultra Dividend Revenue ETF (RDIV), and the Wisdom Tree US Quality Dividend Growth ETF (DGRW). The first two average just under 4% yields and have fees well under 40 bp. The Wisdomtree fund seeks dividend growth names, has lower yields, and costs 28 bp.


FINSUM: We are fans of the high dividend and low volatility approach, so quite like the Invesco fund here. LeggMason also has another good option with that theme, LVHD.

(New York)

Stable income is in the best place it has been for years. The yield curve has stabilized with rates at reasonable levels, which means finding decent-yielding investments isn’t nearly as hard as it was a few years ago. That said, income investments, especially at the higher-yielding end, have pitfalls. With that in mind, here are some good income ideas. The picks come from Franklin Templeton’s $73 bn Income Fund. Some of the top names held (holding assets across the capital structure) are Chesapeake Energy, Tenet Healthcare, JP Morgan Chase, Wells Fargo, Softbank Group, and Bank of America.


FINSUM: This is a very energy and financials heavy group, which has its risks.

(Detroit)

The auto sector has had a pretty wild ride since the Financial Crisis. The first half decade after the bailout was pretty strong for autos, with sales growing and high margin SUVs jumping in volume. However, the shift to SUVs and away from cars has grown so great that it is causing the industry some headaches. Further, self-driving cars are a new source of opportunity, but also anxiety. A new survey shows the car industry is likely to join energy and retail as the most embattled sectors this year. Sales are widely expected to fall across the industry, putting further stress on car companies.


FINSUM: In great industry-speak, the threats facing the industry are currently called the “Bermuda triable: unfavorable economic conditions, disruptive forces, and changing consumer preference”. We can’t help but agree.

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