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Big Tech: Late-Cycle Market Calls for Dogs of the Dow

BY | ETF Database
10:17 am ET 11/02/26 | 4 VIEWS
It should go without saying at this point that many advisors and investors have been tackling their equity market by leaning heavily into the tech sector.Key Takeaways: While a cap-weighted tech approach has worked for investors for many years now, the potential for a late-cycle drawdown could benefit a more balanced strategy. Funds like the ALPS Sector Dividend Dogs ETF (SDOG B-) are providing both sector diversification and strong total return at the same time. SDOG uses the ‘Dogs of the Dow’ investment approach to allocate to top dividend-paying stocks within each equity sector. Sure, big tech may have paid off in the last few years, but that doesn’t make it a foolproof approach. Market concentration carries risk, and evolving macroeconomic conditions may warrant a broader approach to equity exposure. Just look at what’s been going on in the technology sector recently. The sector struggled in October amid investor skepticism over AI capex spending and broadening opportunities within other sectors. These are especially strong concerns for those fearing a late-cycle drawdown. Market cap-weighting may have made sense for a long time, but in a late-cycle regime, earnings growth could decelerate among megacaps and broaden out into the more underappreciated sectors. Furthermore, a late-cycle market may make investors eager to find defensive, durable income without taking on any credit risk. See More: SS&C ALPS Advisors RIngs NYSE Opening Bell Of course, this doesn’t mean that the tech sector should not warrant exposure currently. Instead, investors and advisors may want to consider opting for a broader equity market strategy.The 'Dogs of the Dow' Approach and SDOGThere are certainly plenty of strategies that can help one gain broad equity exposure, but choosing one with a strong track record may be a more sensible option. Take a look at the ALPS Sector Dividend Dogs ETF (SDOG B-), for example. SDOG’s current performance data shows why the fund warrants closer inspection. As of October 30, 2026, it’s up 21.80% year to date and is also offering compelling income, with a 30-day SEC yield of 3.89% as of September 30, 2026. See More: How to Diversify Your Portfolio With Real Assets SDOG builds broad equity exposure through its ‘Dogs of the Dow’ investment philosophy. This means the fund selects companies that are providing the highest amount of yield across all 10 sectors of the market and then equally weighting them. To make this strategy possible, SDOG utilizes the S-Network Sector Dividend Dogs Index. The end result is a fund that can provide a multitude of benefits, especially in a late-cycle market. Not only does SDOG provide balanced sector diversification, but the fund can generate compelling income through dividends at the same time. Regardless of where the market goes from here, diverse sector exposure and equity income will likely both continue to be valuable traits for a portfolio to have. For more news, information, and analysis, visit the ETF Building Blocks Content Hub. VettaFi LLC (“VettaFi”) is the index provider for SDOG, for which it receives an index licensing fee. However, SDOG is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of SDOG.

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