Dividend hunters who are willing to stomach some risk may want to take a look at a financial sector exchange traded fund with robust yields. However, this dividend-themed ETF has a heavy weighting in real estate investment trusts, or REITs.

PowerShares KBW High Dividend Yield Financial Portfolio (NYSEArca: KBWD) has an 8.6% 30-day SEC yield and is up 20.9% year-to-date. KBWD follows the KBW Financial Sector Dividend Yield Index, which is weighted by dividend yield – companies with a higher dividend payout are given a heavier weighting. [Stretching for Yield with ETFs]

According to a Keefe Bruyette & Woods note, yields on the ETF are projected to remain about 8%, compared to the 3% or lower yields of other large dividend ETFs and the S&P 500’s 2.11% yield.

As such, investors have taken notice and funneled over $100 million into KBWD year-to-date, with $14 million added month-to-date. To put this in perspective, the fund now has $153.4 million in assets under management after the market’s rush to dividends.

Nevertheless, potential investors should note that the fund largely tracks small- and mid-cap companies involved in banking, insurance and diversified financial services, along with mortgage real estate investment trusts. Small-cap companies make up 58% of the overall portfolio and mid-caps account for 36%.

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