Prior to this week, roughly 60 new exchange-traded products
had come to market this year.
This week is brisk on the new product introduction as
investors have been treated to new leveraged plays on Japan as
well as a
second Israel ETF
. Later this week, some new currency hedged products are expected
Even with the raft of new international
that have debuted this week, investors still love dividend ETFs.
Investors poured $3.7 billion into dividend ETFs last month,
bringing the year-to-date total to almost $15 billion,
according to BlackRock
. Throw in the $6.9 billion into real estate funds and the $3.3
billion that went to preferred stock funds and income oriented
ETFs have seen year-to-date inflows of $24.7 billion.
With those factoids in mind, it probably is not surprising
that of six top
asset-gathering ETFs to debut this year
are funds with bond or income biases. Investors should note that
proficiency in asset-gathering is not always a harbinger of
returns, so we have decided to offer up a list of what we think
are some of the best new dividend ETFs. In no particular
Cambria Shareholder Yield ETF (NYSE:
) Courtesy of Mebane Faber, the Cambria Shareholder Yield ETF
represents one of the more unique spins on an income ETF
investors will encounter. This five-week old fund is about much
more than dividends.
"SYLD invests in 100 stocks with market caps greater than $200
million that rank among the highest in (a) paying cash dividends,
(b) engaging in net share repurchases, and (c) paying down debt
on their balance sheets,"
according to the fund's web site
The result is a reasonably priced actively managed ETF (annual
fee of just 0.59 percent) that gives investors exposure to both
dividends and buybacks via 100 companies that care about having
strong balance sheets. SYLD is an equal-weight ETF and top-10
holdings include Boston Scientific (NYSE:
), State Street (NYSE:
) and GameStop (NYSE:
WisdomTree U.S. Dividend Growth Fund (NASDAQ:
) The WisdomTree U.S. Dividend Growth Fund is a week younger than
SYLD, but both funds belong on income investors' radar screens.
In terms of equity-based income ETFs, there is an old guard and a
new guard. The old guard is comprised of large, highly popular
ETFs that have been solid performers over long time frames.
Those ETFs are usually heavy on staples, health care and/or
utilities stocks. Some of those funds are built on
backward-looking dividend increase streaks. ETFs such as DGRW
represent the new guard of dividend ETFs. Technology is now the
largest U.S. dividend-paying sector,
a fact dividend investors cannot afford to
DGRW makes sure that will not happen with 20.5 percent weight
to tech. Do not worry. Staples and health care combine for 27.1
percent of DGRW's weight.
Don't Forget Bonds Rising Treasury yields are pressuring bond
investors, but there are a few new bond ETFs that are worth a
look. The actively managed AdvisorShares Newfleet Multi-Sector
Income ETF (NYSE:
) debuted in mid-March and already has almost $83.2 million in
assets under management. The fund features a mix of Treasurys,
investment-grade and junk corporates and mortgage-backed
securities, among others. Most importantly, MINC's duration is
just 2.71 years,
according to AdvisorShares data
Another new, international short-duration play is the Global
Short Term High Yield Bond Portfolio (NYSE:
). That ETF, which is just a week old, has an effective duration
of 1.76 years. Adventurous investors may want to keep an eye out
for a possible rebound in emerging markets debt and use the
Vanguard Emerging Markets Government Bond ETF (NASDAQ:
) to play that rebound. With an expense ratio of 0.35 percent,
the newly minted VWOB is cheaper than 72 percent of comparable
according to Vanguard
For more on ETFs, click
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