|Bid||42.56 x 1000|
|Ask||42.86 x 800|
|Day's Range||42.79 - 43.15|
|52 Week Range||37.96 - 45.81|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||0.46|
|Expense Ratio (net)||0.48%|
Investors could make a near-term bet on rate sensitive sectors in the basket form as these will continue to trade smoothly if interest rates remain steady.
Mortgage real estate investment trusts, also known as mREITs, are an income-generating asset class that has been made more accessible to a broader swath of investors thanks to exchange traded funds. The ...
Investors could make a short-term play on the rate sensitive sectors in the basket form as these will continue to trade smoothly if interest rates remain muted.
Currently, the dividend yield on the S&P 500 is right around 2%. That underscores an issue facing many yield-focused investors: There are plenty of dividend funds out there, but not a lot of dividend funds have jaw-dropping, double-digit yields. Of course, there are risks with high-yielding securities -- namely that the yield is higher because the price has declined. With individual stocks, high dividend yields can often portend negative dividend action, such as cuts, eliminations or suspensions. Investors willing to take some risk with high-yield dividend funds will find that just about 1% of the entire U.S. exchange-traded fund (ETF) universe sports yields of 10% or more. Even adjusting that down a little still doesn't exactly open the floodgates. InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 F-Rated Stocks That Could Break Your Portfolio Here's a look at some tempting high-dividend ETFs, some of which should be avoided and some of which are worth considering. ### Invesco KBW High Dividend Yield Financial ETF (KBWD) Source: Shutterstock Expense Ratio: 2.42% per year, or $242 on a $10,000 investment. Dividend Yield: 8.3% Many of the dividend funds that yield 8% or more are small, are leveraged or use complex methodologies. With those factors in mind, we started with the Invesco KBW High Dividend Yield Financial ETF (NASDAQ:KBWD), which yields 8.3%. Some sectors are not known for high yields, and the broader financial services sector is one of those, but KBWD is a dividend fund that offers investors more financial services income. The high-yield objective limits KBWD's roster to 40 stocks, many of which are mortgage real estate investment trusts (mREITs). None of KBWD's holdings are large-cap stocks and about two-thirds are small caps, plus the total expense ratio is 2.42%, indicating that this dividend fund needs risk appetite to be robust and the Federal Reserve to lay off rate hikes to enjoy a fruitful 2019. ### Global X SuperDividend ETF (SDIV) Expense Ratio: 0.58% Dividend Yield: 7.9% The Global X SuperDividend ETF (NYSEARCA:SDIV) is a dividend fund with a yield that doesn't quite reach 8%. Still, SDIV's 12-month dividend yield of 7.9% is tempting. This $931 million dividend fund tracks the Solactive Global SuperDividend Index. SDIV, which pays a monthly dividend, is heavily dependent on REITs as drivers of returns. That also means there is some sensitivity to rising interest rates with this dividend fund, as SDIV devotes over 55% of its combined weight to REITs and mREITs. * 7 S&P 500 Stocks to Buy That Tore Up Earnings Still, historical data indicates high dividend stocks can weather higher rates. In seven of the past 10 rising-rate regimes, high-dividend stocks actually topped the S&P 500, according to Global X research. ### Global X Nasdaq 100 Covered Call ETF (QYLD) Expense Ratio: 0.6% Dividend Yield: 12.5% The tech-heavy Nasdaq-100 Index is not known as a high-yield destination. In fact, its dividend yield is lower than the paltry 2% found on the S&P 500. The Global X Nasdaq 100 Covered Call ETF (NASDAQ:QYLD) alters that conversation in a big way. QYLD has a trailing 12-month dividend yield of 12.5%. As its name implies, this dividend fund generates that lofty income level by using covered calls. This dividend fund targets the the CBOE Nasdaq-100 BuyWrite V2 Index. "QYLD's covered call position is created by buying (or owning) the stocks in the Nasdaq 100 Index (NDX) and selling a monthly at-the-money index call option," according to Global X research. "An option is a contract sold by one party to another that gives the buyer the right, but not the obligation, to buy (call) or sell (put) a stock at an agreed upon price (strike price) within a certain period or on a specific date. In return for the sale of the call option, the fund receives a premium, which can potentially provide income in sideways markets and limited protection in declining markets." ### iShares Mortgage Real Estate ETF (REM) Expense Ratio: 0.48% Dividend Yield: 10% This dividend fund is one of the largest ETFs dedicated to high-yielding mREITs. The $1.18 billion iShares Mortgage Real Estate ETF (NYSEARCA:REM) follows the FTSE Nareit All Mortgage Capped Index and yields 10%. While assets such as mREITs can see increased volatility as interest rates rise, REM's three-year standard deviation of just under 11% is not alarmingly high. * 7 Stocks With Too Much Riding On China It's important to understand that mREITs make money by borrowing money at short-term rates and lending that capital out at higher rates, meaning a rapid rise in short-term rates highlights some of the vulnerabilities associated with this asset class. ### VanEck Vectors BDC Income ETF (BIZD) Expense Ratio: 9.41% Dividend Yield: 9.6% Investors looking for high-yielding, alternative assets may want to consider business development companies (BDCs). BDCs are structured like REITs, meaning 90% of profits are typically paid out in the form of dividends. Clearly, the rub with the VanEck Vectors BDC Income ETF (NYSEARCA:BIZD) is its high expense ratio. However, there is more to this dividend fund's expense story. "An SEC rule addressing funds of funds (such as BIZD) adopted in 2006, requires a fund of funds to report a total expense ratio in its prospectus fee table that accounts for both the expenses that a fund pays directly out of its assets (direct expenses), and the expense ratios of the underlying funds, including business development companies (BDCs), in which it invests are called acquired fund fees (AFFEs). AFFEs are indirect expenses," according to VanEck. Bottom line: This dividend fund's true expenses to investors are closer to 0.41% annually and BIZD yields over 9%. ### VanEck Vectors Mortgage REIT Income ETF (MORT) Expense Ratio: 0.41% Dividend Yield: 7.9% Another dividend fund that highlights the income opportunities available with mREITs, the VanEck Vectors Mortgage REIT Income ETF (NYSEARCA:MORT) also falls just short of an 8% at the present moment. Home to 25 mREITs, this dividend fund follows the MVIS US Mortgage REITs Index (MVMORTTG). "In recent years, yields from mortgage REITs have been higher than those of equity REITs and many income-oriented securities," according to VanEck. "Mortgage REITs may potentially stand to benefit from the evolving mortgage finance market but are sensitive to interest rate and regulatory changes." * 10 Stocks to Sell in February With bond markets pricing in a slower pace of interest rate hikes this year or no hikes at all, MORT is reflecting that more sanguine outlook with a year-to-date gain of 9.4%. This dividend fund currently resides less than 6% below its 52-week high. ### VanEck Vectors High Income MLP ETF (YMLP) Expense Ratio: 0.82% Dividend Yield: 11.3% With the energy sector rebounding to start 2019, some of the best-performing dividend funds are those offering exposure to master limited partnerships (MLPs). The VanEck Vectors High Income MLP ETF (NYSEARCA:YMLP) holds just 18 MLPs, but this dividend fund is setting a torrid pace this year with a gain of almost 15%. YMLP, which tracks the Solactive High Income MLP Index, has a jaw-dropping 12-month yield of 11.3%. The energy sector is widely viewed as a value play and YMLP reflects as much. This dividend fund had a price-to-earnings ratio of just 7.95x at the end of last year, according to issuer data. YMLP offers the potential for some mergers and acquisitions exposure as more general partners have been acquiring MLPs to take advantage of new tax laws. Historically, MLPs are not intimately correlated to oil prices, but those correlations increased in recent years, making MLPs a valid income-generating but risky way to play rising oil prices. Over the near-term, the tide appears to favor MLPs. "The [oil] market is being boosted by optimism over the higher-level trade talks between the United States and China that were completed on January 31. Also underpinning the market is strong adherence to the OPEC-led supply cuts during January," reports OilPrice.com. As of this writing, Todd Shriber did not own any of the aforementioned securities. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 S&P 500 Stocks to Buy That Tore Up Earnings * 10 Cold Weather Stocks to Heat Up Your Returns * The 7 Best Penny Stocks to Buy Compare Brokers The post 7 High-Yield ETFs for Brave Investors appeared first on InvestorPlace.
Since the financial crisis, it has been a long, slow process of finding reliable yield. Investors have had a difficult time in the face of central banks cutting interest rates and introducing huge amounts of monetary stimulus.
Freddie Mac, a secondary market player that helps add liquidity to the mortgage industry, said Thursday that the average interest rate on a 30-year, fixed-rate mortgage dropped by three basis points to 4.55 percent a week ago--the iShares Mortgage Real Estate Capped ETF (REM) has been experiencing a recent uptick this week and could be benefitting from the rate decline. REM seeks to track the investment results of an index composed of U.S. REITs that hold U.S. residential and commercial mortgages--the FTSE NAREIT All Mortgage Capped Index. According to data from CoreLogic, a real estate analytics company, existing homeowners are "more likely to take out a second loan rather than refinance to a higher rate," which would then mean that applications for home equity lines of credit have risen over refinances.
The National Association of Home Builders (or NAHB) is an association of 700 state and local associations of home builders (REM), and real-estate sales and marketing professionals, and re-modelers. The NAHBA conducts a monthly survey of its members and constructs the housing market index (or HMI) based on the results of the survey. The survey asks respondents to rate the current conditions and expected conditions in the next six months as “good,” “fair,” or “poor.” The survey mostly relates to the single-family housing (ITB) market.
The US Fed has clearly communicated its intentions to continue the rate hike path at the June monetary policy meeting, as the US economy continued to expand. The US Fed hiked interest rates by 25 basis points at that meeting and left the doors open for two more hikes in 2018. Rising interest rates increase the cost of owning a home for prospective buyers, but the impact hasn’t yet been felt by the housing (XHB) markets, as the recent economic data continues to paint a rosy picture for the housing sector.
The Conference Board Leading Economic Index (or LEI) is a monthly economic series that helps track any changes to the US business cycle. The Conference Board is an independent business membership and research institute that prepares these reports for different economies. In this series, we’ll analyze the changes to the LEI and assess whether the economic model is signaling any changes to the US business cycle.
Consumer prices in the United States grew 2.8% year over year in May 2018, above market expectations of 2.7%. It also marked the highest inflation rate since February 2012. Higher cost of gasoline and shelter led to the estimate beat.
As per the explanatory notes on the Census Bureau’s website, it takes six months to establish a trend in new home (DHI) sales, and the latest data suggest no change in the upward trend of the new home sales (ITB) market. The Census Bureau reported that the median sales price for new homes sold in April was $312,000 compared to $366,000 in March, and the average home price in April was $407,000 compared to $366,000 in March. Overall, the decline across housing market data in April isn’t a reason to worry, as the improving US economy and rising wages could lend the required support to the sector.
The US National Association of Realtors (or NAR) releases a monthly report on the existing home sales (ITB) market. This report contains the trends in existing housing inventory, total housing inventory, median home prices, and mortgage rates. The changes to existing home sales data over a period help investors understand the trends in the secondary housing market (REM).
Tracking changes to the number of building permits issued gives investors insight into the demand and supply conditions in the housing (REM) industry. An increase in the number of building permits in any given month is a signal for increased activity in the housing sector (DHI) in the future, as construction (ITB) activity begins after a few months of the issuance of a permit. As per the recent report, housing units (XHB) authorized by building permits were at a seasonally adjusted rate of 1.4 million, a minor fall of 1.8% from the revised March reading of 1.4 million units.
The National Association of Home Builders (or NAHB) is an association of 700 state and local associations of homebuilders (REM), real estate sales and marketing professionals, and remodelers. The NAHB conducts a monthly survey of its members, and based on this survey, the association publishes a report that includes the housing market index (or HMI). The survey asks respondents to rate the current conditions and expected conditions in the next six months as “good,” “fair,” or “poor” and mostly relates to the single-family housing (ITB) market.
The Conference Board Leading Economic Index (or LEI) is a monthly economic data release that helps investors track changes to the US business cycle. This index was constructed using an economic model that incorporates changes to ten forward-looking economic indicators. The Conference Board is an independent business membership and research institute that prepares reports for different economies.
The US National Association of Realtors (or NAR) releases a monthly report on the existing home sales (ITB) market. Trends in existing housing inventory, total housing inventory, median home prices, and mortgage rates are published in the report. The changes in existing home sales data help us understand the trends in the secondary housing market (REM).
The demand and supply conditions within the housing (REM) sector can be assessed by observing the changes in the number of building permits issued. An increase in the number of building permits in any given month is a signal of increased activity in the housing sector in the future, as construction (ITB) activity begins after a few months of the issuance of a permit. As per the March report, housing units (XHB) authorized by building permits were at a seasonally adjusted rate of 1.4 million, an increase of 2.5% from the revised February reading of 1.3 million units.
The National Association of Home Builders (or NAHB) is an association of 700 state and local associations of homebuilders (REM), real estate sales and marketing professionals, and remodelers. The NAHB publishes a monthly report by surveying these members. The report includes the monthly HMI (housing market index), which is constructed based on the results of the survey.
Yahoo Finance's Zack Guzman and Kristin Myers are joined by Michael Block, Third Seven Advisors managing director and market strategist, to discuss the millennial trend of 'homebuyers remorse' with Deborah Kearns, Bankrate analyst.