Thursday, September 30, 2010

Top Yielding ETFs

If you are looking for high yields, diversification, liquidity, and monthly dividends, then maybe investing in income producing ETFs, also known as Exchange Traded Funds, and ETNs or exchange traded notes, may be what you are looking for. has recently developed a new list of more than 15 ETFs with yields above 3%. Here are a few examples.

The iShares JPMorgan USD Emerging Markets Bond ETF (EMB) yields 5.15%, payable monthly. It attempts to track the JPMorgan EMBI Global Core index.

The PowerShares Preferred ETF (PGX) invests most of its assets in fixed rate U.S. dollar-denominated preferred securities, and attempts to match the Merrill Lynch Fixed Rate Preferred Securities index. It pays a yield of 7.2%.

The First Trust FTSE EPRA/NAREIT Global Real Estate ETF (FFR) attempts to track the FTSE EPRA/NAREIT Developed Markets Real Estate index. This ETF which gives you exposure to real estate around the world yields 5.5%.

Do your homework on these ETFs before investing, especially the yield calculations, since many of the yields are based on recent higher-than-typical dividends that may not be maintained in the future. Always check the historical dividend payment history. In addition, try to buy the ones that are selling below net asset value. A good starting point for high yield ETF ideas is the free database at, which can be downloaded, sorted, added to, and changed.

Disclosure: Author does not own any of the above at the time this was written.


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