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The recent rise in long-dated risk-free interest rates has hurt the performance of stocks that have high dividend yields.  Below we have broken up the S&P 500 into deciles (10 groups of 50 stocks each) based on dividend yield.  Decile 1 in the chart contains the highest yielding stocks in the S&P 500, while decile 10 contains the stocks with the lowest (or no) dividends.  When calculating the average year-to-date percentage change of the stocks in each decile, we found that the stocks in the highest yielding decile are down an average of 5.3% YTD.  That’s a tough performance number in an up market.  Conversely, the four deciles containing the lowest yielding stocks are all outperforming, with the bottom decile (no dividend yields) up 9.8%!  In 2014, high dividend paying stocks were the big winners, but we’ve seen that trend reverse big time in 2015.

Another interesting stock characteristic that has impacted performance this year is institutional ownership.  Below are deciles (10 groups of 50 stocks each) based on the percentage of shares held by institutional investors.  Decile 1 contains the stocks with the most institutional ownership, while decile 10 contains the stocks with the least institutional ownership.  As shown, the decile of stocks with the heaviest institutional ownership is outperforming nicely, while the decile of stocks with the lowest institutional ownership is down 4.1%.  In 2014, institutional investors had a tough time outperforming the market, but that looks to have changed so far this year.

See more stock characteristics that are driving performance in our full decile analysis report available to Bespoke Premium and Bespoke Institutional members.

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