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Earn 5% Plus Yield with These Global ETFs

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With mixed U.S. economic data and the global growth worries, the prospect of the first interest rates rise in almost a decade for later this year has faded. The dismal job report for September and the latest Fed minutes have confirmed this, suggesting accommodative policy for longer than expected in the domestic economy (read: ETFs that Gained & Lost Post Dismal Job Data ).

This has pushed the Treasury yields down with 10-year Treasury yields currently hovering around 2% while U.S. dollar has also weakened in the past few days, raising the appeal for the international stocks. Notably, iShares MSCI ACWI ETF ( ACWI ), which targets the global stock market, surged 6.8% since the start of the fourth quarter.

This is especially true, as a lot of hot money has been flowing into the international markets lately though bouts of volatility have rekindled investors' love for income-focused products. In particular, persistent slowdown in China has spread fears of global repercussions, Japan has been on an uneven recovery path, Europe is struggling with slower growth and many emerging economies are experiencing a slowdown. Early this month, the International Monetary Fund (IMF) cut its global growth forecast once again to 3.1% from 3.3% for this year and to 3.6% from 3.8% for the next.

In this backdrop, the ongoing easing monetary policies across the globe are driving investors in search for higher income. After all, dividend-focused products offer best of both the worlds - safety in the form of payouts and stability in the form of mature companies that are less volatile to the large swings in the stock prices.

The dividend paying securities are the major sources of consistent income for investors to create wealth when returns from the equity market are at risk. This is because the companies that pay dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis read: 5 Overlooked Dividend ETFs Worth Buying Now ).

That being said, we highlight four global dividend ETFs for investors seeking yields and returns in a rocky market. All these funds yield 5% or more, making them excellent choices for yield-hungry investors.

Global X SuperDividend ETF ( SDIV ) - Annual Yield: 7.13%

This ETF provides exposure to 102 high yield stocks from around the world with each holding less than 2% of assets each. This can be easily done by tracking the Solactive Global SuperDividend Index. The fund is well spread out across the market spectrum with 43% in small caps, 33% in mid caps and the rest in large caps. Real estate firms take the top spot at 35% followed by financials (19%) and utilities (12%).

From a country look, about one-third of the portfolio is allocated to America while Europe and the Asia-Pacific account 32% and 26%, respectively. The product has amassed $891.6 billion in its asset base and sees good trading volume of about 246,000 shares a day on average. Expense ratio came in at 0.58%. The fund pays a solid dividend yield of 7.13% while its 30-day SEC yield is higher at 7.37%. It has gained 6.2% since the start of October.

Guggenheim S&P Global Dividend Opportunities Index ETF ( LVL ) - Annual Yield: 6.03%

This fund follows the S&P Global Dividend Opportunities Index, holding 99 securities in its basket. It is well diversified across components as each security holds no more than 4.3% share. However, it has a slight tilt toward large cap stocks, followed by mid caps and small caps. In terms of country exposure, the U.S., Canada, Australia and United Kingdom make up for the top four countries with double-digit exposure each (read: Watch These Country ETFs Rebounding to Start Q4 ).

The ETF has been overlooked by investors as depicted by AUM of $60.2 million and average daily volume of about 31,000 shares. It charges 0.65% in fees per year from investors and yields 6.03% in annual dividends. The 30-day SEC yield stands at 5.98% and the fund surged 9.3% in the first half of October.

SPDR S&P International Dividend ETF ( DWX ) - Annual Yield: 5.56%

This fund follows the S&P International Dividend Opportunities Index and holds 121 securities with each holding less than 4.1% of assets. Energy and utilities take the top two spots with nearly one-fourth share each, followed by energy (15.4%) and telecommunication (15.1%). Australian firms dominate the returns at 24.2% while United Kingdom and Canada make up for 17.1% and 10.3% share, respectively.

From a market cap look, mid caps and large caps combine to make up for 85%, leaving little room for the small caps. The ETF is one of the popular choices in the dividend space with AUM of $1.1 billion and average daily volume of more than 221,000 shares. It charges 45 bps in annual fees and has gained 8.6% in the same time frame. It has an annual dividend yield of 5.56% and 30-day SEC yield of 5.65%.

First Trust Dow Jones Global Select Dividend Index Fund ( FGD ) - Annual Yield: 5.45%

The fund tracks the Dow Jones Global Select Dividend Index, providing exposure to the 98 highest-yielding stocks that have passed the eligibility screens for dividend quality and liquidity. None of the securities accounts for more than 2.7% of the assets. From a sector look, financials take the top spot at 20.7% while utilities, telecom, energy, consumer discretionary and industrials round off the next five spots with double-digit exposure each (see: all the World ETFs here ).

About half of the portfolio is tilted toward large cap stocks while mid caps and small caps take the remainder. In terms of country profile, Australia, United Kingdom, U.S. and Canada occupy the top four positions. The product is tilted toward large cap stocks as it accounts for roughly half of the portfolio while mid caps and small caps take the remainder. It is rich with AUM of $434.6 million and average daily volume of 88,000 shares a day on average. Expense ratio came in at 0.60%. FGD has 5.45% in both annual dividend and 30-day SEC yield. It added 2.2% in the last couple of weeks.

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GLBL-X SUPERDIV (SDIV): ETF Research Reports

GUGG-SP GLBL DV (LVL): ETF Research Reports

SPDR-SP INT DIV (DWX): ETF Research Reports

FT-DJ GL SEL DV (FGD): ETF Research Reports

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


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

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