The ‘Dogs of the Dow' might seem interesting investments to many investors thanks to their historical outperformance. The strategy of the Dow Dogs proved beneficial for eight times over the past 14 years when it outpaced DJIA.

Though Dow Dogs has clearly beaten DJIA returns including dividends in 2014, the concept lagged the benchmark by a slim margin of 50 bps in terms of market performance. The underperformance came despite massive gains of nearly 40% for Intel (INTC), and about 24% for Microsoft (MSFT) and Cisco Systems (CSCO) each. Notably, Chevron (CVX) was the worst performer of the Dow Dogs, losing more than 10% due to the oil price collapse. General Electric (GE) was also hit the hardest while Verizon (VZ) and AT&T (T) lost due to an intense price war.