Categories: Exchange Traded Funds (ETFs)

Diverse Dividends Offer Broad Appeal

Conventional wisdom explains that it is vitally important for any investor to diversify his or her holdings. This is intended to minimize risk from movements or events that disproportionately hurt one type of investment. A fund that offers a way to gain the benefits of diversification is Arrow Dow Jones Global Yield ETF (GYLD).

This fund takes a balanced multi-asset approach across five different strategies. Its holdings emphasize dividends and are based on five separate, specific indexes. It has approximately even holdings in equities, real estate, sovereign debt, corporate debt and alternative assets, with each subcategory targeted towards dividend-paying investments. As the fund’s name indicates, it includes positions from around the globe in each of these areas.

The fund pays out an overall yield of 7.91%, compared to an expense ratio of 0.75%, so investors are rewarded nicely for owning it. Though it has declined by 1.42% this year, when its monthly dividends are accounted for, investors in GYLD have profited in 2015 overall. The following chart shows the fund’s one-year performance.

In terms of individual positions, this fund allocates 8.36% of its assets to its top 10 largest positions. These include Shenzhen Investment Ltd., 1.12%; Ladbrokes PLC, 0.91%; Lewis Group Ltd., 0.87%; LRR Energy LP, 0.84%; and Chesapeake Granite Wash Trust, 0.81%.
In terms of sectors, the fund is most strongly allocated to real estate, financial services and utilities. GYLD’s portfolio of countries includes the United States, Australia, Singapore, France and many others.
For investors seeking a simple way to invest in a number of asset classes for a high and diverse yield, Arrow Dow Jones Global Yield ETF (GYLD) could be just what they want.

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful ETF Investing newsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

In case you missed it, I encourage you to read my e-letter column from last week about a global dividend ETF. I also invite you to comment in the space provided below.

Doug Fabian

Doug Fabian is the Editor of Weekly ETF Report, a free weekly e-newsletter, and the newsletter Successful ETF Investing. He’s also the host of the syndicated radio show, “Doug Fabian’s Wealth Strategies.” Doug also edits the fast-paced trading service ETF Trader’s Edge, for investors who want to take their profits to the next level. Taking over the reins from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbert’s Investment Digest. Doug became a member of the “SmartMoney 30” in 1999 — a listing of the most influential individuals in the mutual fund industry. In the feature, SmartMoney magazine exclaims that Doug is the best-known “trend follower” among the $56 billion (and growing) group of financial advisors. In 2001, Doug wrote “Maverick Investing,” published by McGraw-Hill. He also regularly appears at seminars around the country, stands out on the pages of the largest newspapers (The Wall Street Journal, The Los Angeles Times, and The New York Times), and speaks on national television (CNBC, Fox News, and Bloomberg Forum). For more than 35 years, Successful ETF Investing (formerly the Telephone Switch Newsletter and Successful Investing) has produced double-digit percentage annual gains. Doug has become known for his expert knowledge and timely use of innovative tools, such as exchange-traded funds, bear funds, and enhanced-index funds to profit in any market climate. For more information about Doug’s services, go to http://www.fabian.com/