Flagged for Follow-Up: New Dividend ETF.
Marketwatch tells us that Vanguard hopes to offer a new dividend index fund and ETF come September.
Vanguard investors and ETF fans loving the "equity income" category will have another alternative to Barclays' DVY (Dow Jones Select Dividend Index Fund), which may have confused a lot of people by its index re-jiggering last year, and the ETF offerings from Powershares.
Equity income really hit its stride with the passage of the dividend tax cuts (which tax cuts have not had the anticipated huge effect on corporate dividend payouts, and which tax cuts have helped increase our massive federal budget deficits, but that's another discussion), and the asset class became a favorite of marketing teams throughout the financial services industry. Some tax-savvy investors hold their higher yielding stocks and equity funds (not including REITs, whose dividends are not favored by the tax cut) in taxable accounts, since the dividend taxes they pay on the taxable accounts are now lower than the income taxes they pay on distributions from tax-deferred accounts.
Tax considerations aside, the value of dividend-yielding equity investments in enhancing overall portfolio return has been a popular topic of discussion of late, and dividend-paying equities were championed very persuasively by Wharton's Jeremy Siegel in The Future for Investors.