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5 ETFs For High Yield Investing Across Asset Classes

Mar. 09, 2012 3:18 PM ETAMLP, PCEF, PGX, XLU, HYG7 Comments
Greg Group profile picture
Greg Group
744 Followers

Investors seeking income through ETFs have a difficult time determining where to invest for yield. I like to look at ETF investments from an asset class perspective. This allows investors to identify where to find high yields comparable across different market sectors. I have identified five different investments by asset class, each with a high dividend yield. These assets include: closed end funds, preferred stocks, master limited partnerships, corporate bonds and utilities. Using the Ned Davis Research rating, look to purchase an ETF rated 4 or 5 from the list below. All 3 rated ETFS are considered holds if you already own them. Here is the list of ETFs for consideration.

Closed-end funds (CEFs) were created to provide an income investment for investors. Today, CEFs can be purchased in a variety of asset classes such as equity, preferred stocks, convertible stock, corporate bonds, municipal bonds and other asset classes. The ETF play for CEFs is the PowerShares CEF Income Fund (PCEF). This fund is a "fund of funds" as it Includes CEFs that invest in taxable investment grade fixed-income securities, taxable high yield fixed-income securities and others utilize an equity option writing (selling) strategy. PCEF is trading at $25.30 with an 8.13% distribution yield. Year to date, PCEF has a market return equal to the S&P 500's 8.0% return. PCEF has the highest YTD market return of the 5 ETFs listed in this article. PCEF has an expense ratio of 1.5%. It is rated a 4 (best rating is 5) by Ned Davis Research.

Preferred shares have been outperforming for most of 2012, especially because of their high dividend yields. The ETF play for preferred stocks is the PowerShares Preferred Portfolio (PGX). The PowerShares Preferred Portfolio (FUND) is based on The BofA Merrill Lynch Core Fixed Rate Preferred Securities Index. PGX has

This article was written by

Greg Group profile picture
744 Followers
MBA with extensive background in strategy and investing. Founder of investing company specializing in advanced option strategies and monthly income generation through covered calls and other investments.

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