If there’s any equity ETF segment that almost always comes to investors’ rescue, then that is dividend. And if it has a low price, then what could be better? After all, the broader market is guilty of overvaluation.
U.S. markets have been on cloud nine since Trump’s win on hopes of fiscal reflation. In this northbound journey, stock valuation got elevated. Many are screaming that a steep correction is long overdue. As a result, we just came out of the biggest single-day drop in the S&P 500 since 2011 in early February.
As investors poured in money to make the most of the rally, they may have run out of cash. Obviously, many may want to take part in the buy-the-dip strategy and must be on lookout for some ETFs that are still trading below $20 but have reasons to outperform ahead.
We thus have zeroed in on some global high dividend ETFs. After all, U.S. Treasury bond yields are on an uptrend on the Fed’s rate hike expectations this month as well as an increased inflationary outlook. As of Feb 6, 2018, the yield on benchmark U.S. Treasuries was 2.79%, up from 2.46% noted at the start of the year.
So, investors must be in search of dividend ETFs that offer benchmark-beating yields. After all, high-dividend ETFs and stocks provide investors avenues to make up for capital losses, if that happens at all (read: Rate Hike or Not, Dividend ETFs Are Star Investments).
In a nutshell, a high dividend feature clubbed with cheaper prices could be an intriguing investing strategy at the current level. After all, with low-priced stocks, retail buyers would need less cash to join the market.
Also, stocks below $20 see huge profits as share price increase of a dollar adds to 5% in one’s portfolio. Also, stocks priced at $100 or above see 1% or less gain if their share prices rise by $1.
Thus, we highlight four high yield dividend ETFs and stocks under $20 that investors can keep a watch on in the days to come (see: all the World ETFs here).
Guggenheim S&P Global Dividend Opportunities Index ETF LVL – $11.10
This ETF follows the S&P Global Dividend Opportunities Index which focuses on high yielding securities worldwide. As many as 106 securities are chosen from around the world for inclusion, with heavy exposure going toward the financials (22.1%), consumer staples (15.9%), consumer discretionary (10.9%) and industrials (10.79%). The fund yields about 3.33% annually (as Feb 6, 2018).
Amplify YieldShares Oil Hedged MLP Income ETF AMLX – $11.57
This is an actively managed exchange-traded fund that invests in equity securities of energy MLPs and selectively hedges these positions to limit the correlation of its performance to the price of WTI Crude Oil. It yields 5.02% annually.
First Trust STOXX European Select Dividend Index Fund FDD – $13.90
This ETF follows the STOXX Europe 600 Index, which focuses on high-yielding European securities. Stocks from France, the U.K. and Switzerland account for about two-third of total assets. The fund yields about 2.67% annually (read: What Makes These Europe ETFs Still Roaring).
PowerShares International Dividend Achievers PID – $16.23
This international fund gives exposure to stocks with successive years of dividend growth. Canada (31.7%) and U.K. (26.3%) are the top countries of the fund. Energy (22.7%), Financials (20.8%), Telecom (13.5%), Industrials (13.1%) and Health Care (10.5%) take the top three spots in the fund. It yields 3.43% annually.
Arlington Asset Investment Corp AI – $10.73
It is a principal investment firm that currently invests primarily in mortgage-related and other assets. It yields 21.57% and belongs to a top-ranked Zacks industry (top 12%).
New Senior Investment Group Inc. – $7.22
It is a real estate investment trust focused on investing in senior housing properties across the United States. It yields 14.47% and is placed in a top-ranked Zacks sector (top 25%).
BT Group Plc BT – $16.81
The company is one of the world's leading providers of communications services and solutions. It yields 5.78% annually and has a VGM Score of A.
BRT Realty Trust BRT – $11.35
The company is a real estate investment trust. Its dividend yield is 6.34%.
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