If there’s any equity ETF segment that stands out without fail, it’s dividend. And if it is priced low, what could be better? After all, the broader market is apprehensive of recessionary risks caused by the trade war.
Though Trump offered the much-needed respite to global markets on Aug 13 by delaying the proposed tariffs on many Chinese imports that are not yet to be subjected to higher tariffs, many market watchers including Goldman Sachs
do not foresee any trade deal before Trump’s 2020 election.
So, the investing backdrop will remain volatile in the coming days. Thus, it is better to bet on safer dividend ETFs, more so because the Fed and many other central banks are dovish this year. Also, dividend stocks perform well in a low-rate environment.
Plus, markets hit highs in July. Major indexes like the S&P 500 and the Dow Jones hovered around an all-time high.
SPDR S&P 500 ETF SPY is just trading around 3% down from the all-time high despite a market bloodbath at the start of August.
As investors poured in a lot of money to make the most of the rally, they may have run out of cash. Obviously, many must be on the lookout for ETFs that are still trading below $20 but have reasons to outperform in the days ahead.
We have thus zeroed in on some global high-dividend ETFs. After all, U.S. benchmark Treasury bond yields fell to the lowest level since October 2016. As of Aug 13, the yield on benchmark U.S. Treasuries was 1.68%, down from 2.66% recorded at the start of the year.
In a nutshell, a high dividend feature clubbed with low prices can make an intriguing investment choice at the current level. After all, with low-priced stocks, retail buyers would need less cash to join the market.
Also, stocks below or equal to $20 see huge profits as share price increase of a dollar adds to 5% in one’s portfolio. Meanwhile, stocks priced at $100 or above see 1% or less gain if their share price rises by $1.
Thus, we highlight a few 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). ETRACS Monthly Pay 2xLeveraged Mortgage REIT ETN ( MORL) — $13.98
The ETN is linked to the monthly compounded 2x leveraged performance of the MVIS US Mortgage REITs Index, reduced by accrued fees. It charges 40 bps in fees and 20.51% annually.
Global X SuperDividend Alternatives ETF ( ALTY) — $14.71
The underlying Indxx SuperDividend Alternatives Index tracks the performance of some of the highest dividend yielding securities in each category of alternative investments. It yields 7.09% annually. Its annual operating expense is 2.84%.
Invesco International Dividend Achievers ETF PID — $15.58
The underlying NASDAQ International Dividend Achievers Index identifies an international group of ADR, GDR and non-US ordinary stocks that have qualified as International Dividend Achievers. These companies have increased their aggregate annual regular cash dividend payments consistently for at least each of the last five consecutive years. It yields 4.42% annually.
First Trust S&P International Dividend Aristocrats ETF ( FID ) — $16.38
The underlying S&P International Dividend Aristocrats Index measures the performance of high dividend-yielding, non-U.S. companies that have followed a managed-dividends policy of increasing or maintaining dividends for at least 10 consecutive years. It charges 60 bps in fees and yields 3.71% annually.
Invesco High Yield Equity Dividend Achievers ETF ( PEY Quick Quote PEY - Free Report) – $17.64
The underlying NASDAQ US Dividend Achievers 50 Index is comprised of 50 stocks selected principally on the basis of dividend yield and consistent growth in dividends. The fund charges 54 bps in fees. It yields 3.87% annually.
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