Multi-Asset ETFs Yielding Over 5%
June 11th, 2013 at 7:02am by Tom Lydon
When it comes to income, traders can browse through fixed-income and equity assets. Exchange traded fund investors, though, can hold an all-encompassing, multi-asset that covers multiple income producing investments.
The Guggenheim Multi-Asset Income ETF (NYSEArca: CVY) tracks the Zacks Multi-Asset Income Index, which includes both domestic and international common stocks, American depositary receipts paying dividends, real estate investment trusts, master limited partnerships, closed-end funds, Canadian royalty trusts and traditional preferred stocks. The underlying index follows a computerized model that focuses on high yields, low prices and earnings growth. CVY has a 0.60% expense ratio and a 5.15% 12-month yield. [Dividend ETFs, Yield-Producing Equities Back in Focus]
Stan Luxenberg for TheStreet points out that CVY keeps at least 50% of its assets in dividend-paying equities and currently has about 9% of its holdings in MLPs.
This multi-asset approach has also provided a investors with a diversified approach to income investments. As one asset class slowed, other areas would take the lead. Over the past five years, CVY has gained an annualized 7.7%, compared to the 6.2% return from the S&P 500.
Top holdings include Northern Tier Energy 2.4%, BP Prudhoe Bay Royalty Trust 1.1%, Wells Fargo Advantage Global Dividend Opportunity Fund 1.1%, Pengrowth Energy Corp 1.1% and Penn West Petroleum 1.1%.
Sector allocations include financials 35.9%, energy 19.3%, health care 8.3%, utilities 7.7%, materials 7.2%, information technology 6.5%, consumer discretionary 6.5%, telecom services 4.2%, industrials 2.5% and consumer staples 1.8%.
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