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HIGH YIELDThis posting features a comprehensive review of the high yield dividend ETF sector. This view features those dividend related ETFs that have a much more aggressive focus on dividends and yield versus more established sectors. Sometimes the focus on dividends to exclusion of other considerations can lead to trouble. Some of the higher yielding ETFs are sourced from more volatile areas of the world and may focus on previously more troubled sectors like financials where reliability of the dividend stream had been questioned.

In the U.S. and Europe for example, support for many financial institutions from central banks has allowed these institutions to survive the financial crisis thus far.

That said, there is a rapidly expanding list of ETFs from which to choose.

This is occasioned in part by equity market volatility leading investors to perceive safer havens especially money markets and high rated bonds. Low interest rates have combined with current aging demographics where demand for income and growth has been ubiquitous and steady.

To simplify matters for investors, we've whittled choices down to 10 and without regard to ranking them. The issues chosen represent a broad cross section of domestic, global, overseas, real estate (REITs) and other sectors from a variety of sponsors. Hopefully, reducing the list will make sorting through the sector more manageable for most investors.

Within each category, we filter them by placing importance on high assets under management, liquidity and/or strategies that make a difference being the most critical tests. Newer issues tied to new indexes with long (over 5 years) of historical data may be worth investigating as long as historical index data may be assessed.

We feature a straight forward technical view of conditions from monthly chart views. Simplistically, we recommend longer-term investors stay on the right side of the 12 month simple moving average. When prices are above the moving average, stay long, and when below, remain in cash or short. Some more interested in a fundamental approach may not care so much about technical issues, preferring instead to buy when prices are perceived as low and sell for other reasons when high; but this is not our approach.

Premium members to the ETF Digest are able to receive added signals when markets become extended such as DeMark Indicators, which may signal trend exhaustion when the market in question is extended (overbought/oversold). These indicators are featured in blue boxes on the featured charts.

SPDR S&P International Dividend ETF (NYSEARCA:DWX) The S&P International Dividend Opportunities Index generally includes 100 tradable, exchange-listed common stocks from around the world that offer high dividend yields. The fund was launched in February 2008. The expense ratio is 0.45%. AUM (Assets under Management) equal $1.3 billion and average daily trading volume is less than 200K shares. As of first quarter end 2013, the annual dividend yield was over 5.50% and YTD return was 1.02%. The one year return was 3.54%.

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Wisdom Tree Emerging Market Small Cap ETF (NYSEARCA:DGS) DGS follows a fundamentally weighted index that measures the performance of primarily small cap stocks selected from the WisdomTree Emerging Markets Dividend Index. Companies included in the Index fall within the bottom 10% of total market capitalization of the WisdomTree Emerging Markets Dividend Index as of the annual index measurement date. The fund was launched in October 2007. The expense ratio is 0.64%. AUM near $1.5 billion and average daily trading volume is less than 200K shares. As of first quarter end 2013, the annual dividend yield was less than 3% and YTD return was 4.40%. The one year return was 10.70%.

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Solactive High Income MLP ETF (NYSEARCA:YMLP) follows an index consisting of MLPs involved in oil exploration and production, natural gas exploration and production, the sale, distribution and retail marketing of propane and other natural gas liquids, crude oil shipping, dry bulk shipping, refined products transportation, liquefied natural gas shipping, other marine transportation, and the direct mining, production and marketing of natural resources, including timber, fertilizers, coal and other minerals, and royalty trusts, which typically own the rights to royalties on the production and sales of a natural resource, including oil, gas, minerals and timber. The fund was launched in March 2012. The expense ratio is high at 0.82%. AUM equal $157 million and average daily trading volume is 100K shares. As of first quarter end 2013, the annual dividend yield was just under 5% and YTD return was 6.90%. The one year return was -1.20%.

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Alerian MLP ETF (NYSEARCA:AMLP) The Alerian MLP Infrastructure Index is designed to give investors exposure to the infrastructure component of the Master Limited Partnership asset class. Constituents each earn at least 50% of EBITDA from assets that are not directly exposed to changes in commodity prices. The index is disseminated by the New York Stock Exchange and is a composite of 25 energy infrastructure MLPs. The fund was launched in August 2008. The expense ratio is also high at 0.85%. AUM equal $5.7 billion and average daily trading volume is just under 3M shares As of first quarter end 2013, the annual dividend yield was over 1.5% (low yield reflects just first quarter 2013) and YTD return was 11.10% (which reflects large payout). The one year return was 8.39%.

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Wisdom Tree Emerging Markets Equity Income ETF (NYSEARCA:DEM) follows an Index that is a fundamentally weighted index measuring the performance of the highest dividend yielding stocks selected from the WisdomTree Emerging Markets Dividend Index. The fund was launched in July 2007. The expense ratio is 0.63%. AUM equal $5.4 billion and average daily trading volume is 790K shares. As of first quarter end 2013, the annual dividend yield was less than 4% and YTD return was -3.75%. The one year return was -1.00%.

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FTSE NAREIT Mortgage REIT ETF (NYSEARCA:REM) follows an index measuring the performance of the residential and commercial real estate, mortgage finance, and savings associations sectors of the U.S. equity market. The fund was launched in May 2007. The expense ratio is 0.48%. AUM equal $1.1 billion and average daily trading volume is 845K shares. As of first quarter end 2013, the annual dividend yield was over 5% and YTD return was 1.35%. The one year return was 6.75%.

REM

Wisdom Tree Australia Dividend ETF (NYSEARCA:AUSE) follows the WisdomTree Australia Dividend Index, and is a fundamentally weighted index that measures the performance of high-dividend yielding companies in Australia. The index is comprised of dividend paying companies incorporated in Australia with a minimum market capitalization of $1.0 billion. The index is comprised of the 10 largest qualifying companies from each sector ranked by market capitalization. The fund was launched in June 2006. The expense ratio is 0.58%. AUM equal $77 million and average daily trading volume is low at 7K shares. As of first quarter end 2013, the annual dividend yield was over 4% and YTD return was 11.35%. The one year return was 19.90%.

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Wisdom Tree DEFA High Yielding Equity ETF (NYSEARCA:DTH) follows the WisdomTree DEFA Equity Income Index, and is a fundamentally weighted Index that measures the performance of companies with high dividend yields selected from the WisdomTree DEFA Index. At the index measurement date, companies within the WisdomTree DEFA Index with market capitalizations of at least $200 million and average daily trading volumes of at least $200,000 for the prior three months are ranked by dividend yield. The fund was launched in June 2006. The expense ratio is 0.58%. AUM equal $210 million and average daily trading volume is 25K shares. As of first quarter end 2013, the annual dividend yield was over 4% and YTD return was 3.04%. The one year return was 11.50%.

DTH

Guggenheim Multi-Asset Income ETF (NYSEARCA:CVY) follows the Zacks Multi-Asset Income Index, which is designed to identify companies with potentially high income and superior risk-return profiles as determined by Zacks Investment Research, Inc., the Fund's index provider. The objective of the Index is to select a diversified group of securities with the potential to have a yield in excess of and outperform, on a risk adjusted basis, the Dow Jones U.S. Select Dividend Index and other benchmark indices. The Index is comprised of approximately 125 to 150 securities. The fund was launched in September 2006. The expense ratio is 0.60%. AUM equal $740 million and average daily trading volume is 210K shares. As of first quarter end 2013, the annual dividend yield near 5% and YTD return was 8.90%. The one year return was 13.75%.

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PowerShares High Yield Dividend Achievers ETF (NYSEARCA:PEY) follows the Index comprised of 50 stocks selected principally on the basis of dividend yield and consistent growth in dividends. The fund was launched in September 2004. The expense ratio is 0.50%. AUM equal $300 million and average daily trading volume is 125K shares. As of first quarter end 2013, the annual dividend yield was 3.40% and YTD return was 12.65%. The one year return was 16%. PEY is one of the more established and conservative of the high yield dividend ETFs despite its description.

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Summary

We've tried to provide an assortment of ETFs within the high yield space featuring a diverse group of international, emerging markets, natural resource and domestic ETF exposure. We would recommend investors use an assortment of issues to avoid undue concentration where any one sector is featured. Naturally, doing so would reduce risk. In sum it's a random choice of issues, which are representative, but by no means complete.

Given the overall demographics of the investing public and tone of markets, there will be an ongoing demand for ETFs with yield.

It's important to remember that ETF sponsors have their own competitive business interests when issuing products which may not necessarily align with your investment needs.

The ETF Digest has positions in DGS, DWX, REM, YMLP and CVY in the featured ETFs.

(Source for data is from ETF sponsors and various ETF data providers)

Disclosure: I am long DGS, DWX, YMLP, CVY. 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.

Source: Top 10 High Yield Dividend ETFs