The third quarter was another treat for investors, with the
S&P 500 adding about 5% in the time frame. This continues the
solid run for the market so far in 2013, as the broad benchmark has
now cleared the 20% gain hurdle YTD.
However, with Halloween upon us, some investors might be afraid of
how to allocate their portfolios in the tail end of the year. After
all, last year's Q4 was pretty rocky, and though markets finished
in the green for the three month period, investors definitely saw
heavy levels of volatility (see
3 Top Ranked ETFs from Red Hot Sectors
While the same situation doesn't look to happen this year-since
fiscal cliff issues and debt ceiling problems shouldn't be an issue
this holiday season-there is still reason for concern. The Fed's
plans remain an area to focus on, while sluggish data in some key
corners of the market is also troubling.
Thanks to this, a look to dividend ETFs might be a way to take some
fear out of portfolios, but still remain invested in the markets.
Below, we highlight four ETFs with scary-good yields that could
help investors accomplish this task for the final quarter of the
Quality Dividend Defensive Index Fund (
) - 3% 30 Day SEC Yield
For a low risk play, investors may want to consider QDEF in the
dividend ETF space. The product tracks the Northern Trust Quality
Dividend Defensive Index, holding roughly 190 companies in its
basket, with a focus on lower beta names.
Financials take the top spot in the fund at 17.7%, followed by
technology (14.7%), and staples (12.2%). Top individual holdings
, though the three combine to take up less than 12% of the total
The product could be an interesting choice for those seeking a
moderate dividend play with a focus on the American market.
However, growth will be hard to come by in this fund, while
volatility levels are likely to be low (read
FlexShares Debuts 3 Dividend ETFs
SuperDividend US ETF (
) - 6.7% 30 Day SEC Yield
For investors who are looking for more income in their dividend
ETFs, consider this Global X product. The fund follows the
SuperDividend US Low Volatility Index, holding 50 companies that
have among the highest yields in the U.S.
The ETF utilizes an equal weight approach so that no single company
dominates the portfolio, while a sector cap of 25% is used to
prevent a heavy concentration from that front. Top sectors include
utilities (24%), energy (18%), and real estate (14%).
The product looks to be a bit more volatile than QDEF, though the
yield is obviously higher. Meanwhile, there is a concern about
REITs and utilities here, as these two sectors have been
troublesome lately, though the robust yield is likely to soothe
many fears in this corner of the market.
iShares Emerging Markets Dividend ETF (
) - 4.9% 30 Day SEC Yield
For investors interested in high growth emerging markets with a
dividend focus, DVYE is an intriguing option. The product targets
the Dow Jones Emerging Markets Select Dividend Index, holding
roughly 100 stocks in its basket (see
the Guide to Emerging Market Dividend ETFs
The ETF has a heavy holding in Taiwan companies (27.6%), while
Brazil (15.5%), and South Africa (8.1%) round out the top three.
Top sectors include financials (17.5%), materials (17.2%), and
Given that many emerging markets are now back on track, this ETF
could be a solid way to tap into the bullish trend, with a lower
level of risk. Plus, the fund offers great exposure to many
companies-and countries-that most investors have little in
allocations to, so it could be a great choice from a
WisdomTree International SmallCap Dividend ETF (
) - 2.9% 30 Day SEC Yield
Although the yield is a little light here, DLS could arguably offer
up the best growth prospects of all the funds on the list. The
product tracks the WisdomTree International SmallCap Dividend
Index, giving investors exposure to over 750 small cap companies
that pay dividends from around the developed world.
The ETF uses a dividend weighted approach too, so the firms that
pay out the most in dividends take up the biggest weights. Still,
no single company accounts for more than 1% of assets, so
concentration risks aren't much of an issue in this fund. From a
sector look, industrials (25%), consumer discretionary (20%), and
financials (11%), take the top three spots (see
all the broad Developed World ETFs
Small caps around the globe have been pretty strong performers this
year, as investors have piled into growth names. And with
international markets picking up, this could be a great pick for
investors even if it doesn't pay the highest yield.
There is no need for investors to be afraid this Halloween, so long
as they take a closer look at some of the aforementioned ETFs.
These dividend funds look to provide some stability to portfolios,
while also giving off high rates of income as well.
While any wrinkles from the Fed could definitely hurt some of these
ETFs, with the sluggish data as of late, this shouldn't be too much
of a concern for investors. So feel free to capture the high yields
from these ETFs and hopefully ride the market to another profitable
final quarter of the year.
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GLBL-X SPRDV US (DIV): ETF Research Reports
WISDMTR-INT SCF (DLS): ETF Research Reports
ISHARS-EM DIV (DVYE): ETF Research Reports
FLEXS-Q DIV DEF (QDEF): ETF Research Reports
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