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In yesterday's Chart of the Day, we discussed how rotational this month's declines have been. Additionally, there is one other factor at play. In the chart below, we've performed a decile analysis of the Russell 1,000 to see how stocks have done this month based on their dividend yields. The stocks in the deciles to the left of the chart have the lowest or no dividend yields, while the deciles on the right have the highest dividend yields. The bar for each decile shows the average month-to-date percentage change of the stocks in each decile. Generally speaking, it has been the highest dividend payers that have held up the best so far this month, while the no or low-yielders have fallen the most.

Dividends don't impact total return much over short time frames, but they make a massive difference over the long term. There are plenty of ways to seek dividends including a number of dividend-focused ETFs. However, not all dividend ETFs are created equally. Below we show three popular ones: the iShares Select Dividend ETF (DVY), the SPDR S&P Dividend ETF (SDY), and the ProShares S&P 500 Dividend Aristocrats ETF (NOBL). While they may appear similar to one another at face value, each ETF is constructed with a different methodology.

For starters, DVY holdings include 100 US stocks that must have at least five years of dividend payments. Of these three ETFs, that is the shortest dividend time requirement. For inclusion into SDY, the methodology requires holdings to have consistently increased dividends for at least 20 years, and the NOBL ETF has the most stringent rules with a required 25-year history of raising dividend yields with many holdings having far longer histories. As shown below, for performance over the past decade, those longer payout histories have (pun intended) paid dividends. NOBL has posted the best total return over the past decade with a gain of 172% (10.54% annualized). That compares to a 156% return for SDY and a 145% return for DVY. For comparison to a broader basket of stocks, that annualized return for NOBL even outpaces the broader S&P 500 Value ETF (IVE), but note that it's still a couple of percentage points worse than the annualized total return of the S&P 500 ETF (SPY).

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