Dog of the ETF Universe Trading Strategy
The Dogs of the Dow is a proven long term investment strategy for outperforming the market. But does it work with Exchange Traded Funds instead of individual stocks? The results will surprise you!
- Check out my Dogs of the ETF Universe interactive tool here (free, no registration required).
Watch the video below for the full details of how to find ETF dogs:
My strategy is somewhat different to the original strategy.
Instead of screening stocks for the 10 highest yielders, I simply buy the 3 worst performing ETFs of the year, then hold them throughout the following year. I then rotate into the next 3 dogs.
The results have been pretty spectacular. I scored a massive hit by being long China in 2024. An ETF full of meme stonks soared for me in 2023. The best dog was Turkey – up a stunning 91.6% in 2022. Some flopped, but overall the strategy returned an amazing 169% in just 3 years.
By the way, my site is new and I need to backtest the strategy to see how it performed before 2022. My site also only currently lists 105 ETFs. I’ve already included most investible countries and stock sectors, but I still need to add fixed income and some other sectors.
In the video I also ran the same methodology on the inverse dogs (i.e. buying the 3 best performing ETFs each year) to see if momentum is a winning strategy. Spoiler: it’s not. It’s much better to be a contrarian. For that you’ll need patience.
As well as buying dog ETFs, this strategy could also potentially be used with investment or retirment accounts where you only have a limited selection of investment choices such as mutual funds or unit trusts.
Disclaimer: this video is for entertainment purposes only and is not financial advice.
