Dividends: Counting On Something Other Than Capital Appreciation
24 September 2007 at 11:03 am by Gary Gordon
ETFs track hundreds of indexes… and many pay dividends quarterly. The S&P 500 SPDR (SPY) offers an annual yield that approximates 1.8%.
In the case of foreign stocks, some of the ETF trackers pay annual dividends… well… annually!The iShares MSCI Emerging Markets Fund (EEM) and the iShares MSCI EAFE Fund (EFA) serve up 1% and 2% at the end of each year respectively.
Yet there are dozens of new alternatives in the dividend-seeking world. WisdomTree offers more dividend-oriented index investments than Baskin Robbins offers ice cream flavors… 32 to be exact!
At WisdomTree, they come in large, medium, small, international, Europe, Asia, and emerging markets. One who wants emerging market exposure with a bit of a "risk premium payment" might like the WisdomTree Emerging Market Dividend Fund (DEM); currently, it is offering a yield near 5.75%.
WisdomTree also covers each major economic segment on the international scene. Although International Materials (DBN) and International Energy (DKA) have been the hottest money makers, the volatility on the downside can be extreme. In fact, all international sector funds can take a serious "beat-down" under bearish pressure.
The long-term theme that I lean on is "infrastructure." When I think about growth abroad, I think about turning on the lights, the phone and the Internet.
For this reason, I am fond of International Communications (DGG) and International Utilities (DBU). The Communications Fund offers 4.7% per year at is trading at 52-week highs. Utilities chimes in with 3.7% annually and is closing in on new highs as well.
Back in April, I discussed more about the WisdomTree fund family; specifically, I expressed my practical approach to successful investing by avoiding the "big loss" in WisdomTree ETFs.
