Are investors following the Dogs of the Dow strategy?

2011 was a good year for those following the “Dogs of the Dow” strategy, which suggests investing equally in each of the 10 Dow stocks with the highest dividend yields at the beginning of the year.

According to CNBC, a FactSet media client, the 10 companies that made the list last year “are up about 17 percent, adjusting for dividends, compared with a 1.7 percent loss for the non-dog stocks and a 5 percent increase for all 30 Dow components.”

So who benefited? Using FactSet’s Ownership 2.0, we can examine investors to discover whether they purchased the 2011 Dow Dog securities in the first quarter of 2011. Then, we can compare those purchases/sales to the previous year.

Using Ownership screening, we can find all mutual fund managers that have a high yield strategy. These investors would be the “shoe in” types to invest in a strategy like this. Do they follow the Dow Dog strategy?

Edge Asset Management in the United States, tagged as a Yield investor, increased their position in 10 of the Dow Dog securities in Q1 2011. They also purchased most of these securities in Q1 2010. Are they going to purchase the 2012 Dow Dog securities? We can check back after Q1 reporting is complete.

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Looking at Credit Suisse (US), which is not tagged as a yield investor but a broader investor, we can see they sold nine of the 2011 Dow Dog securities in Q1 of 2010. In Q1 2011, they purchased 10 of the Dow Dog securities. Could they have possibly changed their investment strategy to Dow Dog?

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We will have to wait and see what the first quarter of 2012 has in store for these investors. Meanwhile, you can track the holdings of institutions you cover with Ownership 2.0.

FactSet clients: Launch these reports in Ownership 2.0.

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