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<p>CICC Securities pointed out that the dividend strategy in the US stock market has long been superior to the broad market index, especially during market downturns, where the S&P 500 High Dividend Index outperforms. Over the past twenty years, the index has had an annualized return of 12.0%, higher than the S&P 500's 10.5%. During periods of decline in the US stock market, the performance of this index is also more stable, demonstrating good profitability, growth, and cash flow</p>

- Dividend Strategy Performance in the US Stock Market:
  - Historically, dividend strategies in the US stock market outperformed the S&P 500 index with higher stability. Over the past two decades, various dividend indices like Dow Jones US Dividend 100, S&P 500 Quality High Dividend, S&P 500 Dividend Aristocrats had annualized returns ranging from 9.4% to 12.0%, surpassing the S&P 500 index. During market downturns, the S&P 500 Quality High Dividend index often showed better returns.
  - Comparison of S&P 500 Quality High Dividend Index with S&P 500:
    - In different economic phases, like the strong US economy from 2003 to 2007 and the low-interest-rate period from 2011 to 2019, the S&P 500 Quality High Dividend Index consistently outperformed the S&P 500 index by 0.8% to 2.4% annually.
- Sources of Returns in Dividend Strategy:
  - The returns of the S&P 500 Quality High Dividend Index primarily come from dividends, buybacks, and price appreciation. During robust economic growth, price appreciation and buyback yields were significant contributors to total returns. In contrast, during low-interest-rate periods, dividend yields played a more substantial role.
  - Analysis of Industry Dividend and Buyback Returns in the S&P 500 Quality High Dividend Index:
    - Across different economic phases, industries like communication services consistently led in buyback and dividend yields. Utilities and information technology sectors showed higher buyback yields, while real estate and energy sectors had higher dividend yields.
- Investment Approach for Dividend Strategy:
  - The S&P 500 Quality High Dividend Index emphasizes quality and dividend yield in stock selection. It focuses on high Return on Equity (ROE), low Accruals Ratio, and low Financial Leverage Ratio stocks with high forecasted dividend yields.
  - The index's components exhibit stable profitability, high earnings growth, ample free cash flow, and a strong dividend payout culture, supporting their high dividend payouts and growth potential.
- Related ETFs and Current Components of the S&P 500 Quality High Dividend Index:
  - ETFs tracking the S&P 500 Quality High Dividend Index include QDIV, while ETFs following the S&P 500 Dividend Aristocrats Index are NOBL, KNG, 429000, and 2236. As of August 19, 2024, these ETFs had varying management sizes, with NOBL being the largest at $121 billion.

How does the dividend strategy perform in the US stock market?