The need for global income is more readily apparent as U.S. companies are slashing their dividends in order to preserve cash thanks to the coronavirus pandemic. One of those is auto manufacturing giant General Motors, which is feeling the pangs of manufacturing plants and auto dealerships having to shut down.
Per a CNBC report, “plants have been shuttered since mid-March due to the Covid-19 outbreak sweeping across the U.S. The automaker, along with Ford Motor and Fiat Chrysler, are in discussions with the United Auto Workers union to reopen the plants, but union leaders said last week they oppose restarting production in early May announced by several automakers.
However, there is some light at the end of the tunnel as one of GM’s competitors is already looking to restart production.
“GM and Ford are among the only major automakers that have yet to announce a time frame to restart production,” the report added. “Fiat Chrysler earlier this month announced plans to restart production in a week.”
“We continue to enhance our liquidity to help navigate the uncertainties in the global market created by this pandemic,” GM Chief Financial Officer Dhivya Suryadevara said Monday in a statement. “Fortifying our cash position and strengthening our balance sheet will position the company to create value for all our stakeholders through this cycle.”
As more companies are looking to stymie the effects of the pandemic by cutting dividends, investors can look to global yield opportunities. Seeking fixed income opportunities around the globe could help yield-hungry investors satiate their appetites while sectors like manufacturing return to normal.
One of these alternatives is the Principal Active Global Dividend Income ETF (GDVD). GDVD’s prime focus is seeking current income and long-term growth of income and capital.
The fund is an actively managed ETF that seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its net assets, plus any borrowings for investment purposes, in dividend-paying equity securities at the time of purchase. It invests in equity securities of small, medium and large market capitalization companies and in growth and value stocks.
GDVD offers investors:
- Emphasis on dividend growth: Dividend growers and payers have historically had higher returns with less risk than non-dividend paying stocks.
- High-quality companies: Adhering to a quality-first mentality removes subpar operators, helping to avoid value traps.
- Thinking outside the box: Based in the Pacific Northwest, we avoid Wall Street’s herd mentality, which reinforces our contrarian edge.
For more market trends, visit ETF Trends.