Extremely low interest rates have crippled income investors scratching for yield in bonds and the fixed-income market. However, investors who are still seeking attractive payouts can look to globally oriented dividend exchange traded funds that invest in the stock market.
For instance, the Global X SuperDividend ETF (NYSEARCA:SDIV) comes with a 7.85% 12-month dividend yield.
In comparison, the S&P 500 has a dividend yield of just 2.11%, while the benchmark 10-year Treasury has a 1.63% yield.
The Global X SuperDividend fund tries to reflect the performance of the Solactive Global SuperDividend Index, which follows 100 equally weighted companies that are ranked amongst the highest dividend yielding equity securities in the world. SDIV has a 0.58% expense ratio.
SDIV's country allocations as of September 30 include U.S. 29.3%, Australia 24.5%, U.K. 12.4%, Singapore 6.2%, Canada 5.8%, Poland 2.2%, Germany 2.1%, China 2.0%, Netherlands 1.6% and Brazil 1.5%.
Within the foreign markets, investors can find opportunities for higher dividend payouts. For instance, in looking at the top countries of SDIV, the country-specific ETFs iShares MSCI Australia Index (NYSEARCA:EWA) has a 4.45% yield, iShares MSCI United Kingdom Index (NYSEARCA:EWU) has a 3.51% yield and iShares MSCI Singapore Index (NYSEARCA:EWS) has a 3.51% yield.
On a sector basis, the ETF leans toward dividend paying areas, such as real estate or REITs at 25.5%, financial services at 19.2%, telecommunications at 14.5%, and utilities 8.3%. Still, investors should know that the high yield comes with greater risk as the ETF weighted toward more speculative companies -- market-capitalization break down includes giant 7.5%, large 13.8%, mid 47.3%, small 28.8% and micro 2.6%.
Global X SuperDividend ETF
Max Chen contributed to this article.
Disclosure: I am long SDIV. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Tom Lydon's clients own SDIV.