Are you craving more risk and the potential for higher yields in your investments? There are several overlooked high-yield exchange traded funds (ETFs) that are gaining as investors become more risk-tolerant.
Investors can use ETFs for a number of reasons, including to capture capital appreciation and above-average dividends, writes Matthew D. McCall for Seeking Alpha. McCall provides a few ETFs he believes will have the right amount of performance and dividend yields. We should note, too, that this is by no means a complete list of all high-yielding ETFs with good performance – there are many available, so be sure to look around.
SPDR Barclays Capital High Yield Bond (JNK), currently up 23.8% year-to-date, follows corporate high-yield bonds, otherwise known as junk. The ETF also pays out a monthly dividend that comes out to an annual yield of 13%. When the economy goes back to normal, undervalued risky assets could begin to attract more attention.
iShares S&P U.S. Preferred Stock Index (PFF), currently up 27.4% year-to-date, tracks preferred shares of companies, primarily in the financial sector. Annual dividend yield is 11%. The ETF is a good way to tamp down some risk that comes with including the financial sector in an investment portfolio.