ETFs Paying 8% Plus Dividend Yields

There are currently more than a handful Exchange Traded Funds that are paying more than an 8% dividend yield. And yes, you are reading that correctly, more than an 8% dividend yield. There are at least four ETF’s currently paying dividend yields above 8%, while a few others are paying yields even higher.

Furthermore, these ETF’s are investing what is surprisingly a wide range of different investments, meaning even if you’re not a fan of REITS or MLP’s, there is still may be an ETF, that’s paying a healthy yield, out there waiting for you. So, let’s take a look at a few of the different options.

First, we have what most would expect out of a high dividend-yielding ETF, an MLP ETF. The VanEck Vectors High Income MLP ETF (YMLP) is currently yielding 8.18% and has an expense ratio of just 0.82%. The fund has 18 holdings, all of which are MLP’s structured as C-corporations. Also, the weighted average market cap is only $1.36 billion, and the funds top nine holdings all fall in line at 7% to just over 8% fund weighting. Year to date the fund is up 18%, but only 2% over the last month and 3.85% over the previous year.

Another typical high dividend-paying investment is a REIT or Real-Estate-Investment-Trust. And you can imagine when one ETF owns 27 different REIT’s, the dividend gets a little juiced. One such ETF is the VanEck Vectors Mortgage REIT Income ETF (MORT) which has a yield of 7.4% but has an expense ratio of just 0.41%. MORT has 27 holdings with a weighted average market cap of $5.13 billion and has a year-to-date performance of 10.93% while being up just 1.55% over the last month and 11.61% over the last 12 months. MORT invests in mortgage REIT’s which are REIT’s that own mortgages or mortgage back securities. The risk with these investments is that we see outsized mortgage loan default rates, such as what we saw during the last recession. Continue reading "ETFs Paying 8% Plus Dividend Yields"