High Yield ETFs
Posted on July 03, 2010 at 22:11 PM EDT
There are plenty of advantages of investing in income ETFs, also known as Exchange Traded Funds, and are occasionally referred to as ETNs or exchange traded notes.

* Many pay high yields
* Diversification of securities in the portfolio
* The liquidity is better than a bond mutual fund
* Several ETF industries and sectors to choose from (e.g. high yield bond, real estate, and emerging markets bond)
* Most pay dividends monthly

WallStreetNewsNetwork.com has turned up a new list of more than 15 with yields above 3%. Here are a few examples.

The PowerShares Preferred ETF (PGX) invests most of its assets in fixed rate U.S. dollar-denominated preferred securities, and attempts to match the Merrill Lynch Fixed Rate Preferred Securities index. It pays a yield of 7.9%.

The long named First Trust FTSE EPRA/NAREIT Global Real Estate ETF (FFR) attempts to track the FTSE EPRA/NAREIT Developed Markets Real Estate index. This ETF which gives you exposure to real estate around the world yields 6.3%.

iShares JPMorgan USD Emerging Markets Bond ETF (EMB) yields 5.7%, payable monthly. It attempts to track the JPMorgan EMBI Global Core index.

Do your homework on these ETFs before investing, especially the yield calculations, since many of the yields are based on recent higher-than-typical dividends that may not be maintained in the future. Always check the historical dividend payment history. A good starting point for high yield ETF ideas is the free database at wsnn.com, which can be downloaded, sorted, added to, and changed.

Author does not own any of the above.


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