hi I’m Jimmy in this video I’m gonna
walk through five of my favorite high yielding dividend ETFs that pay a
monthly dividend now this video is actually the second video where I look
at monthly dividend ETFs in the last video I focused on larger ETFs in that
they had more money in them and that they also tended to pay a slightly lower
dividend yield call it three to five or six percent I’ve got a link in the
description below if you’re curious but for this video I’m actually looking for
higher yielding ETFs call it a minimum of 5% ideally get us closer to 10% now
there’s a couple of warnings that I think are important to consider with
smaller ETFs or even very high yielding dividend ETFs and that is first that
oftentimes these types of ETFs come with higher fees and of course none of us
want to pay higher fees and personally I’m okay with the fee generally if it’s
not too high as long as that particularly ETF brings something unique
to our portfolio now given a choice of two of the similar ETFs I think it makes
sense to choose the one with lower with a lower fee that being said if you
happen to know of any monthly dividend ETFs that are similar to any of the
monthly dividend ETF that I talked about here but they have better fees please
let us all know in the comments below and the second thing to be aware of is
that sometimes smaller funds get shut down since the fund manager makes their
money based on the fee that they charge and how much assets they have in that
fund some fund managers may choose to close smaller funds so we should be
aware that that’s it’s always possible that that type of thing happens when
we’re looking at smaller ETFs or smaller index funds or whatever it might be now
if that does happen it’s not the worst thing in the world since they would just
liquidate the fund and we should get our fair value returned to us so that fair
value is likely to be very close to the price of the ETF at that time so
whatever the price is they’re gonna liquidate that we’re gonna get our that
money returned to us as if we sold the ETF okay let’s jump into our first
monthly dividend ETF high dividend ETF first up we have the high-yield ETF ticker
symbol HYLD they have a dividend yield of a bit over seven percent they’ve
about 125 million dollars in assets and if they charge a higher fee of about 118
basis points now this is a high fee in fact this is the highest fee on our list
that’s why I’m starting with them now what this ETF does is they invest in
high-yield bonds in fact this is a list of their top holdings and just so we’re
all on the same page here’s how we can read this sort of descriptor so le e is
the ticker symbol of the company that issued this bond in this case it’s Lee
enterprises this company pays a nine and a half percent coupon yield and they
mature in 2022 then over here the two point one percent
well that’s simply saying that for this ETF well this particular holding
represents two point one percent of the overall portfolio now for curious HYLD has about a hundred eighty or so holdings within the portfolio and like I
said they pay a decent dividend yield of a bit over seven percent which is why we
might be willing to tolerate the higher expense ratio and when we look at their
dividend history what we can see it’s been fairly consistent and over the past
few over the past few months they’ve consistently kept it at about 20 cents
per month so I think that this type of bond ETF could be a good diversify from
many of our portfolios now if this thing is too much for us and in some people’s
mind is very well could be well for that we have the next monthly dividend ETF
which is called the iShares broad high-yield corporate bond etf ticker
symbol USHY they have a dividend yield of about 5.8 percent they have
about four point six billion dollars in assets and they have a fee of just 22
basis points now this ETF has a similar style of investments except when we look
at their top holdings well here we could sit they top the target slightly lower
paying bonds you can sort of see that when we run down the line here so it
sort of makes sense that they would have a dividend yield in the six percent
range and we look at their dividend history well once again we can see that
it’s been fairly consistent now this is the reason that I included both this ETF
and the last ETF is because they’re both doing similar things
except we have this one with 5.8% in yield and then the last one which has a
higher dividend yield so depending on what we’re after with the dividend yield
we might be willing to accept a higher fee if perhaps were in a situation where
we need a higher dividend yield so that both going after bonds which I think
broadly speaking belong in a lot of people’s portfolio okay up next we have
the global X super dividend emerging markets ETF ticker symbol SDEM and as
we might guess this monthly dividend ETF focuses on stocks from the emerging
markets they have a 7% dividend yield and they have about twenty million
dollars in assets which is low but like I said not too concerned about it at
this point simply because if global X opted to shut down this fund well they
would essentially just sell the underlying holdings and we would get the
value of those shares back to us but if that’s a concern for some investors I
completely understand and in that case we should skip over this one but for
those that are curious this is what their dividend history looks like and as
we could see it’s been fairly consistent which is a good thing for us dividend
investors okay up next we have another global X monthly dividend ETF they do a
lot of them but this time we’re looking at their REIT ETF. REIT, R E I T is short
for real estate investment trusts their ticker symbol is SRET they have a
didn’t yield of a bit less than 8% they have about 540 million dollars in assets
and they have an expense ratio of about 59 basis points and as we might have
guessed they invest in REITs and these are some of their top holdings right
here and these REITs have some tax advantages all REITs have some tax
advantages that generally allow for them to pay higher dividend yields
essentially they don’t pay corporate income taxes as long as they pay out
most of their profits in the form of dividends so you end up with a very high
dividend yielding ETF which helps explain they’re almost eight percent
dividend yield and when we look at their dividend history while we can once again
see that they’ve been fairly consistent swinging ever-so-slightly around the
$0.10 per month mark okay next up we have the global X Nasdaq 100 covered call ETF ticker symbol QYLD as we can see like I said global X
really focuses on monthly dividend ETFs they have an impressive dividend yield
of about nine point eight percent they have about a billion dollars in assets
and they charge an expense ratio of about sixty basis points some of their
largest holdings our companies like Apple Microsoft Amazon alphabet now you
may notice that they actually have an alphabet here twice and that’s because
this ETF owns both Class A shares and Class C shares okay
now the way that this ETF is able to pay such a high dividend yield is because
they sell call options on the shares of the stocks that they own so they buy
these top companies and they sell covered calls on them and as we could
see with their dividend history well it’s been fairly consistent for the past
few years and the good news is that even if the price of some of these companies
were to fall well it’s possible that the portfolio managers are able to generate
consistent consistent dividend like income by selling covered calls that’s
why some investors really really like covered selling covered calls because it
allows you to sort of generate extra income which in this case produces a
much higher dividend yield so even if some of these stocks don’t pay dividends
at all while global X is essentially able to manufacture dividend like income
by selling covered calls the flip side of cover calls the negative side to it
is that you could restrict your upside so you might not get much might not get
as much capital appreciation now actually did a video on that I walked
through what call options are and how to use covered calls and why people might
use them and how to generate dividend like income from them even if the
company pays dividends we could manufacture additional dividends if
you’re curious well that could be a good next video for you to watch there’s a
link right here there’s a link in the description below and I really want to
thank you for stick with me all the way into the video I hope you found this
interesting thanks that I’ll see in the next video