At the end of last year, a new dividend** was listed, and the name is S&P Dividend ETF (562060). At first glance, I thought this ** was investing in U.S. stock dividend stocks? Who knew that its full name is Huabao S&P China A Dividend Opportunity ETF, which tracks the indexA-share high-dividend listed companies。This seemingly complex index is actually a type of S&P index.
The dividend strategy may be inconspicuous in the eyes of many people, and even think that the company's dividends will be taxed for no reason, which is a failed management. But if we think about it from a different perspectiveThe dividend strategy is actually based on the stability of the best.
First of all, if a listed company wants to pay dividends, it must first have abundant cash flow, and the cash flow is supported by the company's better net profitCompanies that can continue to pay dividends stably are generally long-term and stable in performance.
Secondly, according to the signal theory, dividends of listed companies can often send a signal that the company is doing well, from this point of viewDividends help to maintain stock price stability, especially in a downside market**.
I'll give you an example, in 2023, all major indices will fall badly, but the S&P A-share dividend index rose by 778%, and the S&P A-share dividend index has risen by another 137%。
If you look at the extended cycle, in the 19 years from 2005 to 2023, the S&P A-share Dividend Opportunity Total Return Index has risen cumulativelyUp to 197517%，Annualized increaseNearly 18%.
Data**: wind
In addition, if the listed companies that pay dividends are sorted from high to low according to the dividend yield, they are divided into three groups with the same number, and the group ** constructs a portfolio according to equal weights, which can be seenThe long-term performance of high dividends** has significantly outperformed, and the dividend strategy with high dividends as the core screening indicator has significantly outperformed in the A** field.
Data**: wind
Is it a little surprising to see this, in fact, think about it from another angle, high dividends also mean low valuation, dividend yield is an important indicator to measure the company's ability to pay dividends, dividend yield = total cash dividends total market capitalization, if the numerator denominator is also net profit, then dividend yield = dividend payout ratio price-earnings ratio. With the dividend payout ratio unchanged,The higher the dividend yield, the lower the P/E ratio, i.e., the more undervalued.
Speaking of which, another factor in a dividend strategy is valuation. Valuation is a measure of whether a listed company's current value for money relative to its fundamentals. The dividend strategy uses the dividend yield indicator to find the lowest valuation companies in the market, and the stock price of these companies is likely to be repaired in the future, which will generate more generous returns.
At present, there are many dividend strategies in the market, including tracking many ETFs such as the SSE Dividend (510880) Index, the Shenzhen Stock Exchange Dividend Index, and the CSI 300 Dividend Index.
I think there are a few things to consider:
1. The strategy is mature
The dividend index is a strategy index, and the quality of the strategy plays an important role in the performance of the index. The S&P A Dividend Index is compiled by S&P Dow Jones Indices, Inc., the world's largest dividend index**. It has been deeply involved in the dividend strategy for many years, and has actively deployed dividend indices in major markets around the world, and has gradually formed a dividend investor with a mature system, excellent historical performance and long-term testing**.
2. Financial analysis
Everyone is cautious about dividends, you covet the dividends of listed companies, maybe what people want is the principal you buy. Over the years, there have been countless cases of A** borrowing money to pay dividends, and major shareholders have hollowed out listed companies through high dividends. This shows that we should pay attention to the quality of dividends of listed companies, that is, to see how the performance of these dividend-paying companies is through finance, and we can't pick sesame seeds and lose watermelons.
In this regard, the S&P A-share Dividend Index combines the design experience of the global dividend index, and before using the dividend yield index to select companies, it will first examine the current profitability, historical dividend stability and medium and long-term growth of enterprises from a logical perspective, and finally select better high-dividend assets through the quality and dividend stability screening indicators to eliminate companies that are not profitable in the current year, have a declining long-term profitability, have unstable dividends or may have "malicious dividends".
3. Diversified investment
In recent years, there is no typical style and track in the A** field, so it is very risky to bet on an industry. When constructing the index, the S&P A-share Dividend Index adopts a dividend yield weighting method, and sets a 33% industry weight cap and a 3% ** weight cap to increase the index dividend yield level while ensuring position diversification and reducing portfolio unsystematic risk. In addition, the index constituent** value distribution is balanced, and the performance is less affected by the switching of market large and small cap styles, and more focused on obtaining high dividends** dividend income and value-added income.
For example, if we look at the latest S&P A-share dividend index holdings of industries, they basically cover energy, finance, healthcare, real estate and other fields, and it is easier to increase returns by diversifying asset allocation.
4. Dynamic adjustment
The S&P A-share dividend index is repositioned at a reasonable frequency to screen listed companies with high dividend yields in a more timely manner. The S&P China A Dividend Opportunity Index adopts a semi-annual rebalancing mechanism, which provides more flexibility in responding to changes in the dividend yield of listed companies. At the same time, the index uses the historical dividend yield of the past 12 months when screening the constituent stocks, which is also more time-sensitive in terms of dividend yield indicators.
Overall, the S&P China A Dividend Opportunities Index has learned from overseas experience and localized the details, so that the index products can better adapt to China's investment environment.
Content from: zpvermouth
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