Investors seeking an income stream appreciate dividend exchange traded funds as alternative to low-yielding bonds. There are particular funds that provide a higher-than-usual yield with the added benefit of one-shot diversification.
“If you’re an income investor, your primary concern is finding solid investment vehicles paying out impressive dividends. Sure, there are plenty of individual stocks out there with high yields, but trying to pick the best ones can be is a trying task. Fortunately, the ETF landscape is wide enough now that you don’t have to venture into individual equities to get a diversified basket of high-yielding dividend stocks,” Jim Woods wrote on Trader’s Reserve.
Both bond yields and U.S. Treasury yields are at some of the lowest points seen, causing income-seeking investors to venture into the dividend sector. Furthermore, when the market does turn around, dividend stocks and ETFs will deliver price appreciation and the usual cash distribution, reports Susan J. Aluise for InvestorPlace. [Best Dividend ETFs]
Here are some of the highest-yielding ETFs for those investors that are aiming high:
- iShares S&P U.S. Preferred Stock Index (NYSEArca: PFF) Preferred shares have heavy exposure to the financial sector, which works in favor for investors right now. PFF has a yield of 6% and has $8.4 billion in assets. At the end of March the fund was up 10.6% year-to-date. [ETF Spotlight: U.S. Preferred Stock]
- First Trust Dow Jones Global Select Dividend Index Fund (NYSEArca: FGD) This ETF has a yield of 4.7% and a year-to-date return of 7.6%. This ETF gives international exposure to developed markets, and only companies paying out a current dividend are considered for the index.
- Guggenheim Multi-Asset Income ETF (NYSEArca: CVY) The year-to-date return for this ETF is 8%, with a dividend yield of 3.8%. CVY’s holdings are diversified across asset classes and aim to match the Zack’s Multi-Asset Income Index. This ETF, which currently is very energy-focused, selects its holdings from a universe of more than 125 common stocks, real estate investment trusts (REITs), American Depositary Receipts (ADRs) and Master Limited Partnerships (MLPs). [Is Divdend ETF Investing Risky Business?]
First Trust Dow Jones Global Select Dividend Index Fund
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.