- ETFs which have expanded their view of "yield" to include shareholder-friendly activity such as buybacks and paying down debt continue to outperform the general dividend universe as well as the broader market.
- Mebane Faber's 5-month old $122M Cambria Shareholder Yield ETF (SYLD) has a forward dividend yield of 2.9% - slightly higher than VIG or SDY, and a bit less than DVY - but what Faber calls "a net buyback yield" of 5.6%. It's up 9.2% in its short history vs. 2% or less for the other funds and 3% for the S&P 500.
- TrimTabs' Float Shrink ETF (TTFS) goes even further - disregarding dividends entirely to pick 100 of the Russell 3000 companies rapidly reducing outstanding shares while also screening for profitability and low debt. And reducing shares doesn't just mean buybacks: Carl Icahn's Herbalife investment put more than 15% of the stock outside of the free float according to TTFS' managers, thus allowing its inclusion in the fund. Sirius XM Radio was added after Liberty Media's decision to convert its preferred stake into common. The fund's nimbleness makes it pricey with a 0.99% expense ratio. It's ahead of the S&P 500 by more than 1000 bps YTD.
- See also: PowerShares' Buyback Achievers Fund (PKW), the oldest and largest of the group, and ahead of the S&P by 1300 basis points this year.
- Dividend ETFs: FDL, FVD, MDIV, QDF, QDYN, QDEF, DIV, CVY, DVY, HDV, IYLD, PEY, PFM, SCHD, SDY, SDYL, DVYL, VYM, DHS, DTD, SYLD, KBWD, SPHD, DLN, DON, HILO.
Yield includes more than dividend income
Oct 13 2013, 09:01 ET