A hunger for yield continues to make dividend stocks an appealing area of the market. With government bonds serving record low interest rates, some investors are finding comfort in companies that return capital on a regular basis, even billionaires. A new product seeks to help investors follow which dividend names are held by Wall Street’s elite.
On Wednesday, iBillionaire is launching the iBillionaire High Dividend Index (NYSE:IBD), which tracks high dividend stocks owned by a select group of billionaire investors with the greatest cumulative conviction rates. The group includes legendary investors such as Warren Buffett, Ray Dalio, John Paulson, Carl Icahn, and several more. The index is equally weighted and comprised of 50 stocks. In order to be eligible for the index, stocks must be U.S. listed, pay dividends with a monthly or quarterly frequency, and have an indicated dividend yield that is greater than 3%. They must also have a three-month average daily trading volume of more than 200,000 shares.
“We launched the iBillionaire Index in 2013 to help investors identify the top 30 large-cap stocks held by a select pool of leading billionaires. With the iBillionaire High Dividend Index, we’ve put together an equally relevant basket of equities, focusing on something of interest to investors big and small: dividends,” said iBillionaire COO Jack Nguyen in a press release. “Members of the iBillionaire community have been asking for a high-dividend strategy for quite some time, and we’re happy to provide it.”
While past performance is not indicative of future returns, backtesting shows the iBillionaire High Dividend Index would have returned 140% over the five-year period from 2010 to 2014, including dividend reinvestment. Currently, energy and utilities are the largest contributors to the index, at 25% and 19.8%, respectively. The financials sector is a close third, at 18.4%.
The 50 dividend names in the index are listed below:
In addition to the new index, iBillionaire also launched iBillionaire 2.0 for iOS and Android. The revamped app allows investors to stay up to date on stock info, news, trade alerts, and billionaire portfolios. It will also include featured stocks and watch lists. As always, investors need to make sure to do their homework and keep in mind their own financial goals and risk tolerance levels.
Follow Eric on Twitter @Mr_Eric_WSCS