Dividend Exchange traded funds (ETFs) have been attracting substantial capital inflows as investor market volatility persists.
The yields that are currently being generated by other market opportunities are driving investors to seek out these financial instruments, according to Risk Magazine. Pershing Securities, a New Jersey-based firm that offers structured financial instruments and and ETFs as well as acting as a clearing house, has observed the number of ETF positions taken by clients of its firm spike 56 percent in the last year.
“With current yields in the U.S., investors are looking outside of just money markets and bond funds… and a lot of the answers are coming in the form of equity dividends,” Sandra Motusesky, director of investment solutions for product management and development at the company, told the media outlet.
Dow Jones has responded to the surging demand for these dividend paying funds by offering more dividend indices, according to the media outlet. Of the ETFs that have seen the largest of influx of funds this year, several of the top five are appealing because of their dividends, ETF Database reports.