Research Paper Shows High Dividend Paying Stocks Outperformed The S&P 500 In Rising Rate Environments

NEW YORK, Jan. 12, 2016 /PRNewswire/ -- Global X ETFs has released a study evaluating the historical performance of high dividend paying stocks.

Since the Federal Reserve (Fed) brought interest rates to historic lows in 2008, investors have turned to investments other than bonds to meet their income needs. A popular source of income has been stocks that pay high dividends to investors.

The paper, titled "High Dividend Stocks in Rising Interest Rate Environments," examines the historical performance of the highest decile of dividend paying stocks from 1960 to 2014 in an attempt to better understand how these high dividend payers have performed during interest rate hikes.

In 7 of 10 rising interest rate environments since 1960, high dividend stocks outperformed the S&P 500. The three time periods seeing underperformance experienced rapid rate increases, indicating that the speed of increase matters.

Although the Fed has announced that they will raise interest rates, many economists believe these increases will be gradual, and it could take several years before interest rates return to normal levels.

"Investors are eager to understand how rising interest rates may impact their investments," said Jay Jacobs, Director of Research at Global X. "We found that the performance of high dividend stocks was strong during periods of gradual interest rate increases. Current signals from the Fed and the markets indicate that rates are expected to rise only at a tepid pace until concerns over low inflation and global growth abate."


Global X ETFs is a New York-based sponsor of exchange-traded funds (ETFs) and seeks to provide access to high quality and cost efficient investment solutions. Founded in 2008, Global X is recognized for its smart core, income, alpha, risk management and access suites of ETFs. With over 40 funds available across U.S. and foreign exchanges, Global X is one of the fastest growing, most nimble issuers of ETFs.

Shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.

Carefully consider the funds' investment objectives, risks, and charges and expenses. This and other information can be found in the funds' prospectus. Click here for the prospectus. Please read the prospectus carefully before investing.

Global X Management Company LLC serves as an advisor to Global X Funds. The Funds are distributed by SEI Investments Distribution Co. (SIDCO), which is not affiliated with Global X Management Company LLC. Global X Funds are not sponsored, endorsed, issued, sold or promoted by Solactive AG, FTSE, Standard & Poors, NASDAQ, S-Network, Indxx, or MSCI nor do these companies make any representations regarding the advisability of investing in the Global X Funds. Neither SIDCO nor Global X is affiliated with Solactive AG, FTSE, Standard & Poors, NASDAQ, S-Network, Indxx, or MSCI.

Investing involves risk, including the possible loss of principal. High yielding stocks are often speculative, high risk investments. These companies can be paying out more than they can support and may reduce their dividends or stop paying dividends at any time, which could have a material adverse effect on the stock price of these companies.

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SOURCE Global X Management Company LLC

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