ETRACS Monthly Pay 2xLeveraged S&P Dividend ETN (NYSEArca: SDYL)
Current Yield, annualized: 5.47%
Comment: SDYL is an ETN, which exposes investors to potential credit risk from the issuing bank. Still, leveraged yield play on the highly followed S&P High Yield Dividend Aristocrats Index could prove too tempting for some investors to ignore.
SDYL’s income potential comes “in the form of a variable monthly coupon linked to two times the cash distributions, if any, on the index constituents, according to UBS.
The privilege of owning SDYL does not come cheap with an annual tracking rate of 0.3% that accrues on a daily basis. Holdings in the S&P Dividends Aristocrats Index include AT&T (NYSE: T), Kimberly-Clark (NYSE: KMB) and General Dynamics (NYSE: GD).
Tom Lydon’s clients own share of DTN.
