BDCs essentially help fund small $5 million to $100 million businesses and offer attractive income opportunities since they are required to pay out 90% of income in form of dividends, a structure similar to what income investors find with real estate investment trusts.
Given its focus on high dividend-paying stocks, HIPS shows an attractive 7.38% 12-month dividend yield.
HIPS’s current portfolio sector exposures include asset management and BDCs 21%, CEFs 3%, commercial equity REITs 21%, energy processing and transportation 20%, energy production 1%, mortgage REITs 15% and residential/diversified equity REITs 19%.
Top holdings include Simon Property Group 6.3%, Blackstone Group 5.0%, Enterprise Prod Partners 4.3%, Welltower 3.1% and Ventas 2.8%.
“HIPS is an important acquisition for the firm as it seeks to serve as the benchmark for high income pass-through securities and has historically been one of the highest yielding ETFs in the market,” GraniteShares CEO and ETF entrepreneur Will Rhind said in a note. “This fund looks to mitigate sector risk associated with portfolio overconcentration, something often found with MLP investments. With its diversity, liquidity and yield, HIPS furthers our mission of providing good ideas to investors in the form of ETFs.”
For more information on new fund products, visit our new ETFs category.