ETFs on the Market that will Line Your Pockets 12 Times a Year
The virtues of dividend investing cannot be diminished, particularly in a topsy-turvy market environment such as the one investors are coping with right now. Fortunately, there are hundreds of dividend ETFs that can help investors endure the volatility and generate some income along the way.
While there is such a thing as a non-cash dividend, most dividends are paid in cash and that's means more money and only the baby in those lame Capital One (NYSE: COF) commercials starring Jimmy Fallon doesn't like more money.
Some investors like money via dividends so much that they opt for monthly dividend stocks. As we recently highlighted, there are some ETFs on the market that will line your pockets 12 times a year.
That search turned up some interesting finds, including two bond funds, a fund of funds and an international developed market equity play. The good news is that our previous search did not include all of the monthly dividend ETFs on the market and we're back with more solid ideas today.
Market Vectors EM Local Currency Bond ETF (NYSE: EMLC) For those that didn't get the memo, emerging markets bond ETFs are becoming a big deal these days and Van Eck's Market Vectors is helping lead that charge.
The PowerShares Emerging Markets Sovereign Debt ETF (NYSE: PCY) made our previous list of monthly dividend ETFs, but that fund's holdings are denominated in U.S. dollars. EMLC, which has almost $736 million in AUM and focuses primarily on investment-grade issues, takes the local currency angle. Brazil, Poland, South Africa, Mexico and Malaysia combine for almost half of EMLC's country weight and the fund currently yields over 5% with a monthly payout.
PowerShares High Yield Equity Dividend Achievers Portfolio (NYSE: PEY) PEY, which will turn eight years old later this year, is home to 50 stocks and $273 million in AUM. While PCY is heavy on small-cap value names (almost 44% of the fund's weight), the fund holds plenty of familiar blue chip dividend plays such as AT&T (NYSE: T), Altria (NYSE: MO) and Johnson & Johnson (NYSE: JNJ). This monthly dividend payer has a trailing 12-month yield of almost 3.7%.
WisdomTree Emerging Markets Local Debt Fund (NYSE: ELD) A primary rival to EMLC, the WisdomTree Emerging Markets Local Debt Fund is an ETF with plenty of superlatives. With an expense ratio of 0.55%, it's relatively cheap for an actively managed ETF. With over $1.2 billion in AUM, it's one of the largest actively managed ETFs. The fund is up almost 7% year-to-date and has a 30-day SEC yield north of 5%. Add to all that, investors can count on monthly income from this fund.
Market Vectors International High Yield Bond ETF (NYSE: IHY) Or the iShares Global ex USD High Yield Corporate Bond Fund (BATS: HYXU). The pair debuted on April 3, marking the start of what could be an interesting ETF rivalry.
Both ETFs feature non-U.S. issues denominated in Euros, U.S. dollars, Canadian dollars or pounds sterling and both have expense ratios of 0.4%. About 77% of IHY's holdings are rated BB or B with 15.6% not rated by S&P. HYXU offers scant investment grade exposure and about 71% of its issues are found in BB+ to B- universe. Only 7.4% of HYXU's issues aren't rated by S&P.
About a third of IHY's holdings hail from the emerging markets universe while HYXU is entirely devoted to developed markets. According to the Van Eck Web site IHY has a 30-day SEC yield of 6.94% and is expected to pay its dividend monthly and that could make it the preferred play for income investors.
For more on monthly dividend ETFs, please click HERE.
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