Market Overview

Three High Yield ETF's (DVY, IYE, IDU)

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Investors are becoming increasingly wary that the markets are due for a pullback, as the S&P 500 is up approximately 7% since the beginning of the month.

In order to protect from the expected pullback, investors may look to move into ETF's with some yield to mitigate some of the risk.

iShares Dow Jones US Real Estate (NYSE: IYR) is a real estate ETF that focuses on REIT's, which are generally high-dividend paying assets. Due to legality, REIT's are required to pay out 90% of their net income in the form of dividends. REIT's have been particularly strong this year, as investors look to lock in yield, as well as capital appreciation.

IYR has a yield of 3.5%.

Some of the top holdings of IYR are Public Storage Common Stock (NYSE: PSA), Simon Property Group, Inc. (NYSE: SPG), and Vornado Realty Trust (NYSE: VNO).

Dow Jones Select Dividend Index (NYSE: DVY) specifically invests in companies with high dividend yields. The prospectus of the ETF says that the investment seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones Select Dividend index.

DVY has a yield 3.67%, far outpacing the yield on the S&P 500. Some of the top holdings are Chevron (NYSE: CVX), McDonald's (NYSE: MCD) and Lorillard (NYSE: LO).

Utilities generally have some of the higher dividend ratios of dividend paying companies, as utilities are slow, stable companies with high free cash flows. iShares Dow Jones US Utilities ETF (NYSE: IDU) invests specifically in this sector, as it seeks to capture the dividends of the holdings, while mitigating the risk of any particular stock risk. Last week saw shares of PG & E Corp. (NYSE: PCG) fall sharply on a fire in California.

This ETF has a yield of 3.79%, extremely high for an ETF. Some of the top 10 holdings Dominion Resources, Inc. (NYSE: D), Southern Company (NYSE: SO), and Public Service Enterprise Group (NYSE: PEG).

Investors looking to capture yield while looking to keep their risk portfolios short might want to take a look at these high yielding ETF's.

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Posted-In: News Sector ETFs Dividends Specialty ETFs ETFs

 

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