BrokerDealer.com blog post courtesy of extracts from ETF Trends.com, written by Todd Shriber.
Moribund financial services exchange traded funds got some much-needed good news Wednesday when Bank of America (NYSE: BAC) announced the Federal Reserve granted it permission to raise its dividend to common stockholders for the first time in seven years.
BofA said it will pay a quarterly dividend of 5 cents per share up from the paltry penny a share it had been paying since early 2009. Today’s news removes some of the embarrassment suffered by the bank in April when it said it would be forced to suspend its planned $4 billion share repurchase plan and its previously announced dividend increase due to a calculation error related to the company’s acquisition of Merrill Lynch during the financial crisis.
The BofA dividend news sent shares of the Financial Select Sector SPDR (NYSEArca: XLF), the largest U.S. sector ETF, up 0.6% while the iShares U.S. Financials ETF (NYSEArca: IYF) added 0.55%. XLF and IYF have BofA weights of 5.76% and 4.41%, respectively. Continue reading