Dividend stocks have enjoyed a bit of a renaissance this year.
They’re also coming off three years where they deeply underperformed the S&P 500 (SNPINDEX: ^GSPC)
Different stocks perform well in different environments, of course, but absolute returns aren’t always the measuring stick. What matters more is how much return they’re delivering per unit of risk taken. There are more than 100 U.S. dividend-focused exchange-traded funds (ETFs) in the marketplace.
Most trail the returns of the Vanguard S&P 500 ETF (NYSEMKT: VOO) over the past few years, but many are more competitive on a risk-adjusted return basis. The one that stands out above all the others is the Capital Group Dividend Value ETF (NYSEMKT: CGDV). But with this fund specifically, it’s important to understand why it’s done as well as it has.