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An analysis of dividend-oriented equity strategies

27 June 2017 | Portfolio construction

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Equity income strategies are a perennial favourite with investors. This paper takes a look at two popular dividend strategies – high dividend yielding and dividend growth – and explores their impact on portfolios when used in place of high-quality fixed income or broader equities. Key findings include:

  • Equity income strategies are best considered in the context of total return, i.e. income and capital appreciation;
  • Substituting dividend-oriented equities for fixed income can significantly raise the risk profile of portfolios;
  • Equity income funds also tend to be more interest rate sensitive than broad equities;
  • Performance relative to broad equities is time-period-dependent and driven by a handful of underlying factors.

> Want to learn more? Read the paper in full

Important information:

This document is for professional investors as defined under the MiFID Directive only. In Switzerland for institutional investors only. Not for public distribution.

This material was produced by The Vanguard Group, Inc. It is for educational purposes only and is not a recommendation or solicitation to buy or sell investments.

The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.

The opinions expressed in this material are those of individual speakers and may not be representative of The Vanguard Group, Inc.

Any projections should be regarded as hypothetical in nature and do not reflect or guarantee future results.

Issued by Vanguard Asset Management, Limited which is authorised and regulated in the UK by the Financial Conduct Authority. In Switzerland issued by Vanguard Investments Switzerland GmbH.

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