In the two years since Washington slashed tax rates on most corporate dividends, investors have come both to relish and loathe the term “qualified dividends.” Relish, since instead of a tax of 35% or more, the top rate on qualified dividends is 15%. Loathe, because just what makes a dividend qualified is, in Uncle Sam’s reflexively odious way, far more complicated than it need be.
Forbes.com has advice on picking the right dividend ETF:
The battle of the dividend-focused exchange-traded funds may already be over. At least in terms of assets and fund flows, iShares Dow Jones Select Dividend Index (DVY) looks dominant. Its main rival, PowerShares HighYield Dividend Achievers (PEY) , has amassed a respectable $287 million in net assets since its December 2004 launch. However, that’s still less than a third of the $947 million in net new money that iShares Dow Jones Select Dividend gathered in the first two months of 2005.
Americans are being drawn to Asian stocks with higher dividends:
sian companies are shoveling excess cash back to shareholders, giving investors a new reason to buy stocks in a region known for high risks and high returns: reliable dividend income.
“Now you have the best of both worlds in Asia. You have growth companies paying high dividends,” says Damian Kestel, CLSA Asia-Pacific Markets’ country head in Singapore.
According to the American Shareholders Association’s analysis of S&P data
1. Two companies listed on the S&P 500 initiated a dividend in March which brings the total number of net dividend initiations to five through the first three months of 2005.
2. The sharp rise in dividend initiations puts 2005 on pace to mark the third consecutive year the number of companies initiating a dividend will increase.
3. In the first quarter of 2005, 110 companies increased their dividend, a 25 percent increase above 2004’s elevated levels and 63 percent higher than 2003 levels.
Here’s a selection: