|Bid||23.50 x 1300|
|Ask||23.53 x 1300|
|Day's Range||23.47 - 23.49|
|52 Week Range||20.64 - 23.83|
|PE Ratio (TTM)||N/A|
|YTD Daily Total Return||15.99%|
|Beta (3Y Monthly)||0.61|
|Expense Ratio (net)||0.42%|
After raising interest rates four times in 2018, it is likely the Federal Reserve will, at the very least, slow its pace of rate hikes in 2019. Some bond market observers are speculating that it is possible the Fed does not boost borrowing costs at all, while a smaller amount thinks a rate cut is possible later in the year.The more sanguine interest rate outlook is having a profound impact on high-yielding sectors and the related exchange-traded funds (ETFs). In fact, some this year's best sector funds are high-yield ETFs offering exposure to the real estate and utility sectors, among others.Of course, there are some risks to consider with high-yield ETFs. A high dividend yield can mean a stock or fund's price has recently experienced significant retrenchment. In the case of individual companies, a high dividend yield can also be a sign of financial stress and could portend imminent negative dividend action, such as a cut or suspension.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * Top 10 Index Funds to Build a Retirement On Still, many income investors embrace high-yield ETFs. Looking for high-yield ETFs with yields of 10% or more, as we do, turns up an array of complex and leveraged funds, so we parsed those out to focus on more practical high-yield ETFs. Global X Nasdaq 100 Covered Call ETF (QYLD) Expense Ratio: 0.68% per year, or $68 annually per $10,000 investedAmong the high-yield ETFs with dividend yields in excess of 10%, the Global X Nasdaq 100 Covered Call ETF (NASDAQ:QYLD) is one of the more basic strategies to understand. The $470.47 million QYLD tracks the CBOE Nasdaq-100 BuyWrite V2 Index.Essentially what QYLD does is write covered calls on the Nasdaq-100 Index, a popular, but low-yielding tech-heavy benchmark. In terms of generating yield, this high-yield ETF's strategy works out to a trailing 12-month yield of almost 11%. Compare to that a yield of just 0.79% on the Nasdaq-100 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." VanEck Vectors Mortgage REIT Income ETF (MORT)Expense Ratio: 0.41%Mortgage real estate investment trusts, also known as mREITs, are a high-yield asset class that is also sensitive to changes in interest rates. The more sanguine outlook for U.S. interest rates is one of the primary reasons the VanEck Vectors Mortgage REIT Income ETF (NYSEARCA:MORT) is up 9.67% year-to-date."Mortgage REITs may potentially stand to benefit from the evolving mortgage finance market but are sensitive to interest rate and regulatory changes," according to VanEck. * 10 Dangerous Dividend Stocks to Avoid The $169.30 million MORT, which is almost eight years old, holds 25 mREITs and has a 30-day SEC yield of 10.12%. Global X SuperDividend ETF (SDIV)Expense Ratio: 0.58%The $929.59 million Global X SuperDividend ETF (NYSEARCA:SDIV) is a global high-yield ETF and can be used as a complement to basic U.S. and developed market equity funds. Home to just over 100 stocks, this high-yield ETF allocates almost 54% of its weight to domestic equities. Australia and the U.K. combine for over 17% of SDIV's geographic exposure.This high-yield ETF has a distribution yield of 17.50%, which is primarily derived from significant real estate exposure. SDIV features exposure to about 10 industries and sectors, but REITs and mREITs combine for about 55.60% of the fund's roster.With that level of real estate exposure, SDIV can be sensitive to changes in interest rates in the U.S. and some other developed markets. This high-yield ETF pays its dividend monthly, a trait to consider for investors looking for consistent income. InfraCap MLP ETF (AMZA)Expense Ratio: 0.95%Any list of high-yield ETFs is bound to include a fund or two dedicated to master limited partnerships (MLPs). The InfraCap MLP ETF (NYSEARCA:AMZA) makes the cut here as its yield is a whopping 14%.That is high, even among MLP funds, but AMZA uses some methodologies beyond equity ownership to boost its yield. This high-yield ETF can use options strategies as hedges and to boost income."Modest leverage (typically 20-30%) is utilized to enhance MLP beta, and options strategies are used in an effort to enhanced current income," according to the issuer. * 7 Cheap Energy Stocks to Buy Now AMZA's managers can also selectively short MLPs, potentially adding another avenue of returns for this high-yield ETF's investors. Saba Closed-End Funds ETF (CEFS)Expense Ratio: 2.55%The Saba Closed-End Funds ETF (CBOE:CEFS) does not have a dividend yield of 10%, but it still qualifies as a high-yield ETF with a yield of 8.51%."Closed-end funds or CEFs are a publicly traded investment company that raised a certain amount of capital once through an initial public offering," according to ETF Trends. "The price of the CEF can fluctuate like any other stock listed on an exchange. However, unlike ETFs, a CEF issues a set number of shares, so the CEF can trade at a high premium or discount to its underlying net asset value."Actively managed, CEFS offers investors capital appreciation potential and robust levels of income by investing in closed-end funds residing at discounts to their net asset values (NAVs). This high-yield ETF's managers also look to hedge interest rate risk.As of this writing, Todd Shriber did not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 5 Data Center Buys That Deliver Sizable Income * 7 High-Risk Stocks With Big Potential Rewards * 3 Marijuana Stocks to Watch as New York, New Jersey Delay Legalization Compare Brokers The post 5 High-Yield ETFs to Buy for Massive Income Potential appeared first on InvestorPlace.
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 ...
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.