Comparing same sector ETFs and ETNs: The returns

Surbhi Jain

An investor's guide to ETFs and ETNs: A comparative study (Part 5 of 6)

(Continued from Part 4)

Even when on the pricing front, both the DVHI ETN and the IYLD ETF compare well, it is the returns and volatility that need closer examination.

It is important to note here that the DVHI is a newer security, incepted in September 2013, while the IYLD was incepted in April, 2012. So, comparing the two securities on the past one-year return basis doesn’t hold ground.

Looking at the 13-week returns figures, the DVHI proves to be a good match for IYLD. The shorter-term yield figures seem to turn the table in favor of the DVHI. By outperforming the IYLD ETF in its one-week and four-week returns, the DVHI ETN does justify the benefits that accrue to an ETN versus an ETF, as mentioned in Part 2 of this series.

However, the high beta and volatility in case of DVHI, as can be seen in the chart above, hint toward the need to exercise caution and due diligence before investing.

Competitor analysis

Comparing DVHI ETN returns to the returns of its major ETF competitors, including the iShares Morningstar Multi-Asset Income Index Fund (IYLD), the SPDR SSgA Income Allocation ETF (INKM), and the Guggenheim Multi-Asset Income ETF (CVY), which has holdings in Seagate Technology PLC (STX) and Merck & Company Inc. (MRK), the returns of the ETN have beat not one, but all of the popular ETFs taken for comparison (except the 13-week return against IYLD, which is still a close match).

Continue to Part 6

Browse this series on Market Realist: