Following this strategy is simple: choose the 10 FTSE 100 shares with the highest yield, invest equal amounts in all 10 and hold for a year. You then repeat the process the following year with the new highest yielders.
While the Dogs of the Footsie is a simple buy-and-hold investment strategy, it has been very successful for long-term investors. Money Observer first began tracking the Dogs in 2001, and the portfolio has beaten the benchmark in 12 of the past 19 years in total return terms.
Since 2001, the average annual total return from the Dogs portfolio has been 12.2%, compared with 5.9% from the FTSE 100, so more than double the index return, and getting on for triple if you look just at share price gains.
Changes in the 2020 line-up
Once again, it’s time to reset our Dogs of the Footsie portfolio by choosing the 10 highest-yielding shares the FTSE 100 index has to offer. This year, seven names have been carried over from 2019 into the new line-up. Three new entrants each offer attractive yields of around 7%.
Our portfolio spans a diverse spread of sectors, from mining to telecoms, and financial services companies to tobacco firms.
Investors can follow this portfolio or set up a Dogs portfolio themselves at any time. The first step is to find the 10 highest-yielding shares of the FTSE 100 index.
You can run this data yourself easily using services such as interactive investor, SharePad or Digital Look, or find dividend yields using the research available on your share trading platform.