Seeking Alpha

Living4Dividends'  Instablog

Living4Dividends
Send Message
Living4Dividends is an individual investor.
  • high dividend yield ETFs 0 comments
    Jul 31, 2009 9:44 PM
    Matthew D. McCall writes:

    high dividend yield ETFs

    1. SPDR High Yield Bond ETF (JNK) - Invests in corporate high yield (junk) bonds and pays out a monthly dividend that equates to an annual yield of 13%. Junk bonds and other risky assets remain undervalued and as the economy comes out of the recession pricing will move back to normal. JNK should move higher in value and continue to pay its monthly dividend.
    2. iShares S&P US Preferred Stock ETF (PFF) - Invests in preferred shares of companies that are mainly in the financial sector. The annual dividend yield is 11% and the ETF has more than doubled off the low of March after money came back into the financial stocks. PFF is a great way to participate in the financial sector without taking the risk of an individual stock and along the way collect a sizable dividend.
    3. Market Vectors Barclays Municipal High Yield ETF (HYD) - The ETF invests the majority of its assets in high yielding (junk) municipal bonds with about 25% in investment grade bonds. According to the Van Eck website the ETF currently has 30-day SEC yield of 7.16%, which when compared to taxable bonds is even more attractive. If you fall into the 28% tax bracket the tax equivalent yield is 9.94% and as high as 11.02% if you are in the 35% tax bracket. I feel there is more upside in the municipal bonds and that the majority of the high yielding bonds are safe because the federal government will back them up if need be. Whether you agree me that thought or not, I believe it is reality.

    While the first two ETFs are great for a tax deferred account, HYD is ideal for a taxable account and investors in a high tax bracket.


Back To Living4Dividends' Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

  • GBP/USD 1.6473
    Dec 6, 2009
  • EUR/USD 1.4872 + 0.0015
    Dec 6, 2009
  • Dow 10,388.90 +22.75 +0.22%
    Dec 6, 2009
More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.