In the ongoing search for yields, investors can take a look at an outperforming infrastructure exchange traded fund (ETF) that offers some attractive payouts to boot.
The Guggenheim High Income Infrastructure ETF (NYSEArca: GHII), which is composed of the 50 highest-dividend-paying global infrastructure companies, has been outperforming other infrastructure sector-related ETFs, rising 16.0% year-to-date.
Moreover, GHII shows a 5.83% 30-day SEC yield. The fund tries to maximize income generation through a so-called yield-weighting methodology where components with higher payouts have a larger weight.
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GHII’s recent outperformance may be attributed to its asset category allocations. Specifically, the infrastructure ETF is the only one of six ETFs in Morningstar’s Infrastructure category that has a mid-cap value tilt.
As growth stocks fell out of favor this year in response to heightened volatility in the earlier months, the value style came back into play. So far this year, value stocks have been outperforming the growth category, with conservative bets gaining prominence as a safety play. Additionally, within the value category, dividend stocks also garnered a lot of attention after a dovish Federal Reserve signaled fewer interest rate cuts this year, prolonging a low-yield environment.
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Meanwhile, the middle capitalization category has also outperformed, with the S&P 400, a benchmark for mid-cap companies across the U.S., up 5.9% this year, compared to the 2.5% increase in the S&P 500 and 0.5% gain in the Russel 2000.