DIVIDEND YIELD INVESTMENT STRATEGY IN EMERGING MARKETS: AN EMPIRICAL STUDY

Abstract

This study investigates whether a dividend yield investment strategy, adapted from the Dogs of the Dow strategy, generates superior returns in 20 emerging stock markets. The results show that the dividend strategy outperforms the 20 emerging stock markets from 1989 to 2006. In general, the portfolio returns are superior both in the absolute sense as well as in a risk adjusted sense. This is consistent with other studies that tested this strategy in the United States.