Shrewd income-oriented investors got creative in their search for cash payouts during the historically low interest rate environment. Among exchange traded fund offerings, some of the highest dividend payers are not what you would typically expect.
Typically, investors receive dividends as a result of stable quarterly dividend model.
Steady dividend payers usually set dividends at a fraction of yearly earnings to diminish uncertainty for investors and reassure shareholders with steady income.
With ETFs, there are a number of new dividend-generating strategies now in play. For instance, master limited partnerships and real estate investment trusts have become popular dividend sources as the companies are required to release a large portion of income as dividends in exchange for favorable tax treatment.
Additionally, there are some other country and sector specific ETFs with surprisingly attractive yields as well. Although, investors should be aware that while the dividend payouts may look great, not all dividend opportunities are docile.
It should be noted that while the Global X Junior Miners ETF (JUNR) and Global X Gold Explorers ETF (GLDX) show double-digit 12-month yields, the two funds made one single large distribution at the end of the last year. As a resulted, the pair was excluded from this list. The list also focuses on equity-based ETFs and closed-end fund ETFs.
Without further ado, here are the top ten dividend yielding ETFs:
- exchange traded fund