The Morningstar Dividend Leaders Index captures the performance of the 100 highest yielding stocks that have a consistent record of dividend payment and have the ability to sustain their dividend payments. Stocks in the index are weighted in proportion to the total pool of dividends available to investors.
FDL began trading on 3/15/2006, thus does not have a lot of history. Below is its dividend history:
- 21-Dec-07 $ 0.263 Dividend
- 21-Sep-07 $ 0.220 Dividend
- 21-Jun-07 $ 0.200 Dividend
- 23-Mar-07 $ 0.200 Dividend
- 21-Dec-06 $ 0.200 Dividend
- 25-Sep-06 $ 0.200 Dividend
- 23-Jun-06 $ 0.200 Dividend
- Vanguard Dividend Appreciation ETF (VIG)
- Vanguard High Dividend Yield ETF (VYM) (11/16/2006)
- Alpine's Total Dynamic Dividend Fund (AOD) (1/26/2007)
- SPDR S&P Dividend ETF (SDY)
- First Trust Morningstar Dividend Leaders Index (FDL)
- Vanguard REIT ETF (VNQ)
- Vanguard Financials ETF (VFH)
Based on back-testing through 12/31/2007, the Dividend Leaders Index underperformed the S&P 500 in the 1, 3 and 5 year periods, but the index outperformed the S&P 500 in the 10 year period. I was troubled to see just how far the Dividend Leaders Index underperformed the S&P in the 1 year period (-10.24% vs. 5.49%).
For now, FDL is one that I continue to evaluate from the sidelines.