ETF Spotlight on Powershares KBW High Dividend Yield Financial Portfolio ETF (NYSEArca: KBWD), part of an ongoing series.
Assets: $103.7 million.
Objective: The PowerShares KBW High dividend yield Financial Portfolio tries to reflect the performance of the KBW Financial Sector Dividend Yield Index, which utilizes a dividend yield weighted methodology that follows 24 to 40 small- to mid-cap companies involved in financial services and products.
Holdings: Top holdings include: American Capital Agency (NasdaqGS: AGNC) 5.4%, Invesco Mortgage Capital (NYSE: IVR) 4.3%, Annaly Capital Management (NYSE: NLY) 4.6%, PennyMac Mortgage Investment Trust (NYSE: PMT) 4.4% and Chimera Investment Corp (NYSE: CIM) 4.4%.
What You Should Know:
- Invesco PowerShares sponsors the fund.
- KBWD has an expense ratio of 1.32%.
- The fund currently has 36 holdings and the top ten make up 45.5% of the overall portfolio.
- It should be noted that most of the top holdings are real estate investment trusts (REITs), which helps explain the fund’s high dividend yield.
- Market capitalization and style allocations include: large-cap value 4.6%, mid-cap growth 2.0%, mid-cap value 25.8%, small-cap growth 3.1% and small-cap value 64.6%.
- Sector allocations include: financials 93.9%, industrials 1.9% and investment companies 4.3%.
- KBWD has a SEC 30-day yield of 9%.
- The ETF is up 3.1% over the last month, up 4.8% over the past three months and up 16.2% year-to-date.
- The fund is 3.0% above its 200-day exponential moving average.
- “In addition to the risk inherent in high dividend paying funds, this fund increases risk by concentrating in just one sector and on the more volatile small-cap segment,” according to Morningstar analyst Michael Rawson.
The Latest News:
- REITs that focus on multifamily housing have been showing high occupancy rates and high rents, reports Kristin Jones for The Wall Street Journal.
- Demand for rental housing is on the rise and will continue in the near term, with SNL Financial noting that New York and California have seen the most investment as they offer the highest rents.
- “When you look at Treasurys (REITs are) still compelling,” David Toti, a REIT analyst at Cantor Fitzgerald, said in a Fox Business report.
- REITs have outperformed the broader equities market over the last 2 1/2 years as commercial real estate provided a less risky and more stable investment.
Powershares KBW High Dividend Yield Financial Portfolio
For past stories in this series, visit our ETF Spotlight 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.