Investing can start to feel like a game of Russian Roulette when the market is volatile. It's essential to achieve balance, but most investors enter into the game with that understanding. Those eyeing high-yield stocks may appreciate the guaranteed paydays of dividend stock, but it's best to not come to depend on them to perform at your expectations, or even at the expectations of analysts. Dividends can end up getting cut when shares take a nosedive, and it's possible with any stock. If you're looking for an option with less risk, High-yield ETFs may be a better solution as they invest across multiple companies, balancing out the risks with their estimates on which companies will provide the best performance in a sector, with decent potential rewards and balanced risk. Here are 10 high-yield ETFs that might be worth considering for inclusion in your investment portfolio.
10. Virtus InfraCap US Preferred ETF
The Street recommends a newer fund called Virtus InfraCap US Prefered ETF. It's listed under the symbol PFFA. Although the fund took a clobbering during the bear market it's experienced a strong recovery. The yield of the fund is on a 10% increase since hitting a low in March. Under normal market conditions, PFFA is among the less volatile ETFs in its performance. It's a preferred stock fund with a broad base that spread out the risk among multiple segments. It's currently surpassed its historical yield of 9%, which is good news for investors, although PFFA took a monthly dividend cut from $0.19 to $0.15 from the start of the year. With recovery expected to come quickly, the dividend shouldn't be difficult to maintain moving ahead.
9. Amplify High Income ETF
Amplify is listed under the symbol YYY. It's a fund that places its focus on closed-end funds generating a combination of funds that trade at a discount and high yield. Eighty percent of the bonds of the YYYY fund are on the risky side of high-yield notes, which offer a decent potential for a gain during the recovery phase. The future is dependent on the Fed's support of distressed businesses. The outlook is for the Feds to continue those behaviors, posturing YYY in a stable position for the time as an income option with consistent yields from 8-12% and a current yield of 10%.
8. iShares Mortage Real Estate ETF
The iShares Mortgage Real Estate ETF experienced issues during the lowest part of the bear market, hitting a bottom in the first part of April. It lost value when mortgage holders experienced problems making monthly payments on their properties. It dived 70% from its high to a low point during the episode. Since that time, it's gone into a period of recovery with a rebound of over 80%, outperforming both the broader scope of the market and the real estate segment. With economic recovery on the horizon and real estate looking dapper, analysts see improvements in the potential for the REM ETTF. The yield has climbed to a high yield of 14%. Although a cut to distribution is possible in light of Covid-related damages, it's still an ETF worth considering.
7. Vanguard High Dividend Yield ETF
Bankrate suggests that Vanguard High Dividend Yield ETF, listed under the symbol VYM is one worth consideration. The fund has $66 billion of assets under management. It tracks the performance of the FTSE High Dividend Yield Index with a selection of US-based companies that do not include real estate investment trusts. The top holdings of VYM include Home Depot, Johnson & Johnson, and JP Morgan Chase. The dividend yield of the fund is currently at 2.7 percent with an expense ratio of 0.06 percent.
6. ProShares S&P 500 Dividend Aristocrats
ProShares S&P 500 Dividend Aristocrats ETF is listed under the NOBL symbol. The fund currently has $22 billion in assets under management with the top holdings Nucor, Archer Daniels Midland, and AbbVie. It tracks the performance of the SP 500 Dividend Aristocrats Index. Companies under the fund's umbrella must meet the criteria for being a multinational, history of increasing dividends for at least a quarter of a century, and must be household names in reputation. The dividend yield of the fund is 1.9 percent with an expense ratio of 0.35 percent.
5. SPDR S&P Dividend ETF
This fund is listed under the symbol SDY. It has $35 billion in assets under management. SDY tracks the performance of the S&) High Yield Dividend Aristocrats Index with slightly different criteria than the NOBL fund. Companies must show consistent dividend payment increases over the past 20 years or more, opening the fund up to a larger sector of companies for investment. The strategy is paying off with top holdings in IBM, Exxon Mobil, and Chevron. The fund's dividend yield is 2.3 percent with an expense ratio of 0.35 percent.
4. JP Morgan Equity Premium Income ETF
Kiplinger suggests considering the JPMorgan Equity Premium Income ETF with $7.8 billion in assets under management. It exposes investors to popular stock market companies in the equities market with a bit more income earned than through traditional stock investments. The fund seeks mid to large-cap companies with lower volatility holding approximately 100 including Coca-Cola, Eli Lilly, and others. The yield tends to be higher than most others. This ETF has a dividend yield of 7.2 percent with a 0.35 percent expense. It's not unheard of for the yield to jump 15 to 20% in a few months.
3. Global X SuperDivident REIT ETF
If you're fond of real estate investment trusts, this fund is an attractive option with $392.8 million in assets under management and a dividend yield of 6.5 percent. It's listed under the symbol SRET with a focus on real estate, featuring a 60/40 split list of mREITs and REITs with approximately 30 holdings that offer the potential for decent returns. mREITS deals with the paper versus actual properties observing the financial aspects through borrowing and lending at higher interest rates. Top holdings include WP Carey real estate space and Gaming and Leisure Properties.
2. Alerian MLP ETF
Alerian MLP ETF is listed under the symbol AMLP. The fund has $6.5 billion in assets under management with expenses of $0.90 percent and a dividend yield of 7.5 percent. The fund focuses on energy including storage and transportation. Its top holdings include Western Midstream Partners and Energy Transfer with a focus on the transport of gas and oil through pipelines and storage in terminals that connect it with refineries. It's a broad energy fund with a healthy outlook at the present.
1. Invesco Global Listed Private Equity ETF
InvescoGlobal Listed Private Equity ETF is listed under the symbol PSP. Its assets under management are $233.7 million with top holdings Blue Owl Capital and the Carlyle Group. It's fairly diversified with over 75 percent of investments in financials and 80 stocks in its portfolio. The dividend yield is 12.5 percent with expenses at 1.44 percent. It's worth eyeing if you're considering an investment in the financial sector with a bit of diversity thrown in.
Written by Allen Lee
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