DIVIDEND YIELD STRATEGIES DOGS OF THE DOW AND HOUNDS …

DIVIDEND YIELD STRATEGIES : DOGS OF THE DOW AND HOUNDS OF THE BAY

Ratul Kapur BBS, University of Delhi, 2002

Saurabh Suryavanshi BBS, University of Delhi, 2002

PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION

In the Faculty

of Business Administration Global Asset and Wealth Management

O Ratul Kapur, Saurabh Suryavanshi, 2006 SIMON FRASER UNIVERSITY

Fall 2006

All rights reserved. This work may not be reproduced in whole or in part, by photocopy or other means, without permission of the author.

APPROVAL

Name: Degree: Title of Project:

Ratul Kapur and Saurabh Suryavanshi

Master of Business Administration in Global Asset and Wealth management

Dividend Yield Strategies: Dogs of the Dow and Hounds of the Bay

Supervisory Committee:

Dr. Peter C. Klein Senior Supervisor Professor, Finance

Date Approved:

Daniel R. Smith Second Reader Assistant Professor of Finance

December 08,2006

brary SIMON FRASER

UNIWR~IW~I

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Revised: Fall 2006

ABSTRACT

Over the years 'Dogs of The Dow' strategy has become an increasingly popular and intensely argued subject for both practitioners and academicians. This thesis examines the multifarious aspects of the 'Dogs of The Dow' (DoD) strategy and highlights both the euphemism of the believers and reservations of the skeptics. Further on, we empirically test the DoD strategy over a 16 year period from 1990 to 2005. A parallel study, Hounds of The Bay (HOB)is also carried out for the Canadian markets, over the same time period, to test if such a dividend yielding strategy has merits outside of the US market. Overall based on our research and empirical tests, we believe the effect of such a dividend yielding strategy has diminished in the recent years in both US and Canadian markets, while in the Canadian context it may be more subtle. However, this is no indication or a reason to believe that it may not work in the future or more importantly in other countries.

DEDICATION

This project is dedicated to our respective families, who have been eagerly waiting the completion of our MBAs and this thesis. We would also like to dedicate this thesis to our batchmates and faculty of the Global Asset and Wealth Management for their continued support in bringing out the best in us during the program.

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