Investing

Dogs of the Dow or Beating the TSX mutual funds?

  • Last Updated:
  • Oct 3rd, 2017 5:35 am
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[OP]
Deal Addict
Apr 21, 2014
1960 posts
715 upvotes
Alberta

Dogs of the Dow or Beating the TSX mutual funds?

Hey all was reading up on this strategy and kind of like it, both for the high dividend yield and the fact that it automatically means you will be buying low and selling high. However this takes a lot of capital to start (trading fees etc). So are there any mutual funds that do this automatically? Also has anyone here implemented this strategy? Good/bad?

Thanks !!
3 replies
Deal Addict
User avatar
Dec 14, 2010
4955 posts
4557 upvotes
I will be featuring this model very soon on my website. It went live this year in January, it's performing slightly above XIC (presently around 5% total return since January 30th), but the portfolio (10 holdings) yield an average of 4.05%. This is a low turnover model. Backtest when compared to XIC (dividends included):

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Like the Dogs of the Dow strategy, the model seeks valuation through high yield (compared to its historical yield), but it also takes into account quality factors to mitigate the risks of a high yield through unsustainable dividends or deteriorating fundamentals. The model also takes into account history of dividend growth, earnings estimates, industry leadership and technical analysis to confirm that momentum (short term) trend has started, as an attempt to capture when recovery has begun after being undervalued.

It will also feature a model for US Exchange, similar strategy as above, focused on income and quality.

Live model for the Canadian version (started on January this year):

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Live model for the US version (started trading in 2015):

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Rod
Build a comprehensive portfolio based on Investing and Trading strategies. Check out these threads and join the discussion:

Investing strategy based on dividend growth

Trading strategy based on Graham principles.
Deal Fanatic
Jan 27, 2006
9866 posts
3710 upvotes
Vancouver, BC
abc123yyz wrote:
Oct 2nd, 2017 9:51 pm
Hey all was reading up on this strategy and kind of like it, both for the high dividend yield and the fact that it automatically means you will be buying low and selling high. However this takes a lot of capital to start (trading fees etc). So are there any mutual funds that do this automatically? Also has anyone here implemented this strategy? Good/bad?

Thanks !!
Nothing that completely matches it however, there are some that are very similar - http://www.nasdaq.com/article/5-investo ... y-cm430446
Deal Addict
Jul 23, 2007
3599 posts
1419 upvotes
There was a similar thread opened on RFD regarding this back in January.

dogs-tsx-2071392/

The originator of the BTSX strategy was David Stanley. He gave a speech at a financial conference a few years at which I attended and thoroughly enjoyed. Here's his powerpoint presentation.

https://www.canadianmoneysaver.ca/files ... tanley.pdf

Also Robin Speziale has a chapter in his book "Market Masters" where he interviews Ross Grant who now runs the BTSX. You may find the book in your library.

https://robinrspeziale.com/2017/03/02/1 ... -tsx-btsx/

The theory seems to work in Britain as well, with the Dogs of the FTSE 100.

http://www.iii.co.uk/articles/438058/do ... fway-stage

As for the Dogs Of The Dow Strategy it appears to have been more inconsistent in it's results since the book first came out. At least that's what I've observed over the years.

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