5 ETFs With Dividend Yields Above 10%

 |  Includes: KBWD, NLR, PBP, REM, SDIV
by: Dividend Dog

Exchange-traded funds (ETFs) offer investors the convenience of buying a basket of multiple securities all at once. Today, several ETFs with top dividend yields exceeding 10% are available to retail investors:


ETF Name

Distribution Yield (FinViz.com)



Expense Ratio


Global X SuperDividend ETF






Market Vectors Uranium+Nuclear Energy ETF






iShares FTSE NAREIT Mort Plus Cp Idx






PowerShares KBW Hi Div Yield Financial






PowerShares S&P 500 BuyWrite





Click to enlarge

*Provided by Morningstar as a prospective estimate of future values.

Not all of these funds are optimal for investors. Sure, they have made impressive distributions in the past. However, there is no guarantee that their portfolios will permit them to do so going forward. Moreover, there might be better alternatives which provide the same income and return opportunities at lower prices or with lower fees. Each high dividend ETF must be considered separately.

Global X SuperDividend ETF (NYSEARCA:SDIV) consists of stocks from around the globe with heavy weights on the real estate and finance sectors. It is well diversified, with its largest holding accounting for less than 1.5% of the fund’s value. Over 90% of its holdings reside in developed market economies.

Unfortunately, such a heavy weighting on international financials is a significant risk. Worse yet, the fund has exposure to Australian real estate, which is likely in a bubble. Given these macro risks, this fund is not recommendable at this time.

Market Vectors Uranium+Nuclear Energy ETF (NYSEARCA:NLR) invests in firms which participate in nuclear energy, from uranium mining to selling electricity to consumers. Its holdings hail from developed markets across the globe. Uranium and nuclear power are currently attractively priced relative to the energy and mining sectors, which makes the NLR sector focus compelling. Since US retail investors are not able to invest directly in many of its foreign holdings, NLR is an opportunity for income investors to diversify their portfolios with a sensible investment theme.

iShares FTSE NAREIT Mortgage Plus Cp Idx (NYSEARCA:REM) invests in widely available mortgage real estate investment trusts (REITs). Over half of its value is concentrated in these five holdings: Annaly Capital Management (NYSE:NLY), American Capital Agency Corp. (NASDAQ:AGNC), Chimera Investment Corporation (NYSE:CIM), Two Harbors Investment Corp .(NYSE:TWO), and Starwood Property Trust (NYSE:STWD). Investors ought to invest in these levered mortgage REITs directly rather than pay an annual fee to REM.

PowerShares KBW Hi Div Yield Financial (NYSEARCA:KBWD) applies the same strategy as REM, and could be replaced with direct investment in mortgage REITs while avoiding annual fees paid to an ETF.

PowerShares S&P 500 BuyWrite (NYSEARCA:PBP) provides investors exposure to returns from writing options on underlying securities. Its holdings are large cap, highly liquid companies. Option writing is a great way to diversify investment income, and funds like PBP provide a valuable service by selecting and selling options so that investors do not have to do so themselves.

However, there are cheaper ways to invest in option writing funds. There are many closed-end funds (CEFs) which trade at a discount to their holdings and offer higher dividend yields than PBP. EOS, ETY, EXG, and ETJ are Eaton Vance CEFs that all meet or exceed the dividend yield of PBP and trade at sizeable (greater than 10%) discounts to their holdings. Consider these CEFs as alternatives to PBP.

Disclaimer: This article was written to provide investor information and education, and should not be construed as a guarantee or investment advice. I have no idea what your individual risk, time-horizon, and tax circumstances are: please seek the personal advice of a financial planner. This article uses third-party data and may contain approximations and errors. Please check estimates and data for yourself before investing.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.