A Global Dividend ETF With an 8% Yield
December 10th at 2:47pm by Tom Lydon
Extremely low interest rates have crippled income investors scratching for yield in bonds and the fixed-income market. However, investors who are still seeking attractive payouts can look to globally oriented dividend exchange traded funds that invest in the stock market.
In comparison, the S&P 500 has a dividend yield of just 2.11% while the benchmark 10-year Treasury has a 1.63% yield. [Dividend ETFs and the Fiscal Cliff]
The Global X SuperDividend fund tries to reflect the performance of the Solactive Global SuperDividend Index, which follows 100 equally weighted companies that are ranked amongst the highest dividend yielding equity securities in the world. SDIV has a 0.58% expense ratio.
SDIV’s country allocations as of Sept. 30 include U.S. 29.3%, Australia 24.5%, U.K. 12.4%, Singapore 6.2%, Canada 5.8%, Poland 2.2%, Germany 2.1%, China 2.0%, Netherlands 1.6% and Brazil 1.5%.
Within the foreign markets, investors can find opportunities for higher dividend payouts. For instance, in looking at the top countries of SDIV, the country-specific ETFs iShares MSCI Australia Index (NYSEArca: EWA) has a 4.45% yield, iShares MSCI United Kingdom Index (NYSEArca: EWU) has a 3.51% yield and iShares MSCI Singapore Index (NYSEArca: EWS) has a 3.51% yield.
On a sector basis, the ETF leans toward dividend paying areas, such as real estate or REITs at 25.5%, financial services at 19.2% telecommunications at 14.5% and utilities 8.3%. Still, investors should know that the high yield comes with greater risk as the ETF weighted toward more speculative companies – market-capitalization break down includes giant 7.5%, large 13.8%, mid 47.3%, small 28.8% and micro 2.6%.
Global X SuperDividend ETF
For more information on dividends, visit our dividend ETFs category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.