For the past several weeks, we have discussed the exchange-traded fund (ETF) providers that are well known to the general public. We’ve featured well-established and large ETF providers, as well as the ETF divisions of large fund managers. The next few weeks’ ETF Talks will focus on niche providers. The first in this series highlights ALPS.
ALPS probably is best known for providing legal and management services to other investment companies, including some ETF providers that we have profiled previously, such as State Street. ALPS took its expertise in managing ETFs for other financial companies and launched its own ETFs in 2009. The twenty-first ALPS ETF was launched in February.
ALPS focuses on alternative, niche and themed investment products. One such fund is the ALPS Sector Dividend Dogs ETF (SDOG), which seeks to invest in a diversified selection of funds which offer superior yields compared to broad-based equity indices. Using each of the S&P 500’s 10 industrial sectors as its selection pool, SDOG invests in the five stocks with the highest yield in each sector.
This year, the fund has notched 2.13% growth, despite the market’s sharp pullback in February, as well as the latest one in recent weeks. Last year, the fund gained 29.31%. In addition, SDOG issues a quarterly dividend and pays a current yield of 3.42%.
Alternative and niche investments can help round out your portfolio, along with offering diversification and alternate value propositions when the broader market is stagnant or correcting. ALPS provides these kinds of alternative strategies, so you may want to see if one of their strategies, such as SDOG’s modification of the “Dogs of the Dow” technique to find value, is a comfortable fit for your investing style.
If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful Investing newsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.
In case you missed them, I encourage you to read my articles from previous weeks about ETF providers Direxion, Fidelity, Charles Schwab, Guggenheim, PowerShares, WisdomTree, First Trust, ProShares, Vanguard, iShares and State Street.