WisdomTree ETFs Offer Large Yields, Monthly Dividends

By
A A A

Dividends on common stocks are not set in stone. Companies can reduce or take away shareholder dividends at their discretion.

For this reason, owning a basket of income stocks through an exchange traded fund or ETF makes sense.The WisdomTree SmallCap Dividend Fund ( DES ) andMidCap Dividend Fund ( DON ) offer above-market yields and a greater chance of getting a consistent dividend.

WisdomTree's SmallCap Dividend Fund tracks the performance of the company's SmallCap Dividend Index. Investment research firm Morningstar gives the ETF four stars out of five.

Unlike most companies or other ETFs , the WisdomTree SmallCap fund pays dividends on a monthly basis. It switched to monthly payouts in November.

The ETF has a yield of about 3% vs. around 2.5% for the S&P 500.

R.R. Donnelley ( RRD ),Vector Group ( VGR ) andTal International ( TAL ) are its biggest holdings.

WisdomTree's MidCap Dividend Fund tracks the company's MidCap Dividend Index. This ETF is also rated four out of five stars by Morningstar.

It pays dividends on a monthly basis, too. It has a yield of about 2.7%.

Windstream (WIN),Ameren (AEE) andPitney Bowes (PBI) are its top three holdings.

Both ETFs will dole out their next distributions March 28 to shareholders of record on March 26.

While most ETFs use market cap for their weightings, WisdomTree doesn't. Its dividend-focused funds are weighted by the annual dollar amount of dividends (dividend per share times number of shares outstanding) that a company is expected to pay for the year relative to the projected dividend stream from all index companies.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: DES , DON , RRD , TAL , VGR

Investor's Business Daily

Investor's Business Daily

More from Investor's Business Daily:

Related Videos

Stocks

Referenced

Most Active by Volume

139,392,686
  • $5.41 ▼ 18.52%
108,086,733
  • $17.04 ▲ 1.61%
88,411,032
  • $42.085 ▼ 1.19%
35,897,863
  • $101.79 ▲ 0.21%
34,635,836
  • $46.68 ▲ 0.34%
31,162,075
  • $4.36 ▲ 12.37%
31,086,421
  • $26.21 ▲ 0.61%
30,930,862
  • $17.09 ▼ 2.95%
As of 9/18/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com