Searching for Dividend Yield in ETFs

British investor Peter Temple writes about his thoughts on generating more income from his portfolio in the Financial Times column A risky search for yield.

Temple mainly invests via ETFs and is looking at higher yielding equities in both the UK and Europe. For U.S. investors, a search of ETF MarketPro’s directory of Dividend ETFs shows 19 funds that specialize in dividends.

Sorting the directory by yield (click on the word “Yield” in the first row) shows that Dow Jones EPAC Select Dividend Index Fund (IDV) has a distribution yield of 6.16%. The fund tracks an index of companies that have provided relatively high dividend yields on a consistent basis over time. 25% of the portfolio is currently concentrated in financials.

An alternative is the Claymore S&P Global Dividend Opportunities Index ETF (LVL) which has a trailing twelve month dividend yield of 7.74%. The fund tracks an index that consists of 100 common stocks and ADRs that offer high dividend yields. The index uses a yield-driven weighting scheme that weights the highest yielding stocks most heavily.

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