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Dogs of the Dow go to the doghouse

Dogs of the Dow.
Gio Moreano | Munchy the Pooch | CNBC
Dogs of the Dow.

A popular and simple investment strategy that has tended to beat the market is not paying off this year.

The "Dogs of the Dow" is an investment principle that recommends buying the 10 Dow stocks with the highest dividend yields at the start of the year.

While the strategy outperformed the broader index in four of the past five years, its performance in 2015 has fallen way short, a report from Bespoke Investment Group said Monday.

"Every strategy has its share of winners and losers, but this year has been a challenge for the Dogs of the Dow," said David Nelson, high net-worth money manager and chief strategist at Belpointe Asset Management.

"All the dogs are high-quality names that will have their day in the sun, but a few of them are facing secular challenges that may take some time to abate," Nelson said.

Year-to-date, the average performance of the 10 "dogs" stands at a negative 4.5 percent compared with a gain of 0.5 percent for the non-dog stocks, according to Bespoke. The Dow Jones industrial average is down 1.9 percent for 2015 through Monday.

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