Leveraged Dividend ETFs: Too Good To Be True?

By: ETFdb
Investor interest in dividend-paying stocks has generally surged over the past two years, as the combination of climbing volatility and record low interest rates has sent investors flocking towards equities that offer meaningful current returns. The vehicle of choice for many pursuing this objective has been ETFs; there are now some four dozen exchange-traded products that target dividend stocks, with billions of dollars in AUM between them. Many “dividend ETFs” feature yields that are not substantially greater than broad-based equity products. The Vanguard Dividend Appreciation ETF (VIG), for example, has an annual dividend yield barely north of 2%–and roughly in line with the S&P 500 [ETFdb Pro members can access the Monthly Dividend ETFdb Portfolio]. But there are several exchange-traded options for investors seeking more substantial dividends. A relatively new innovation has been the development of ETNs offering leveraged exposure to high yielding asset classes, including dividend-paying stocks, MLPs, and [...] Click here to read the original article on ETFdb.com. Related Posts: UBS Launches 2x Dividend ETNs (DVYL, SDYV) UBS Launches Leveraged Real Estate ETN (RWXL) The Best Dividend ETFs Aren’t Dividend ETFs At All Dividend ETF Special: 25 Equity ETFs With Attractive Distribution Yields UBS Adds 2x Leveraged Version of BDC ETN (BDCL)
Investor interest in dividend-paying stocks has generally surged over the past two years, as the combination of climbing volatility and record low interest rates has sent investors flocking towards equities that offer meaningful current returns. The vehicle of choice for many pursuing this objective has been ETFs; there are now some four dozen exchange-traded products that target dividend stocks, with billions of dollars in AUM between them. Many “dividend ETFs” feature yields that are not substantially greater than broad-based equity products. The Vanguard Dividend Appreciation ETF (VIG), for example, has an annual dividend yield barely north of 2%–and roughly in line with the S&P 500 [ETFdb Pro members can access the Monthly Dividend ETFdb Portfolio]. But there are several exchange-traded options for investors seeking more substantial dividends. A relatively new innovation has been the development of ETNs offering leveraged exposure to high yielding asset classes, including dividend-paying stocks, MLPs, and [...]

Click here to read the original article on ETFdb.com.

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