Yahoo Finance ETFs to Tap If Rates Remain Above 5% for "A Long Time"
Atlanta Fed President Raphael Bostic said the central bank should boost interest rates above 5% by early in the second quarter and then keep at that level for “a long time”, per Bloomberg. Fed officials raised interest rates by a half-point in December, extending their aggressive tightening campaign and bringing the target on their benchmark rate to a target range of 4.25% to 4.5%. The move followed four hefty hikes of 75 basis points to tame inflation running well above their 2% target.
The policymakers also forecast that their key short-term rate will reach a range of 5% to 5.25% by the end of 2023, before being slashed to 4.1% in 2024. That suggests that the Fed is prepared to hike its benchmark rate by an additional three-quarters of a point and then stay put until the end of 2023. If this happens, investors may want to know about the ETF options that yield more than 5%. Below we highlight a few of them.
ETFs in Focus
Global X SuperDividend ETF SDIV – Yield 13.73%; YTD: Up 3.20%
The underlying Solactive Global SuperDividend Index tracks the performance of 100 equally weighted companies that rank among the highest dividend yielding equity securities in the world.The index provider applies certain dividend stability filters. It charges 58 bps in fees.
Invesco KBW High Dividend Yield Financial ETF KBWD – Yield 10.81%; YTD: Up 4.71%
The underlying KBW Nasdaq Financial Sector Dividend Yield Index is a dividend yield weighted index seeking to reflect the performance of approximately 24 to 40 publicly listed financial companies engaged in the business of providing financial services and products, including banking, insurance and diversified financial services, in the United States. The expense ratio of 2.59% annually.
Global X SuperDividend U.S. ETF DIV – Yield 6.49%; YTD: Up 1.92%
The underlying INDXX SuperDividend U.S. Low Volatility Index tracks the performance of 50 equally weighted common stocks, MLPs & REITs that rank among the highest dividend yielding equity securities in the United States. The fund charges 45 bps in fees.
Franklin International Low Volatility High Dividend Index ETF LVHI – Yield 7.51%; YTD: Up 3.09%
The underlying QS International Low Volatility High Dividend Hedged Index is composed of equity securities of developed markets outside the United States with relatively high yield and low price and earnings volatility while mitigating exposure to fluctuations between the values of the U.S. dollar and other international currencies. The fund charges 40 bps in fees.
Xtrackers MSCI All World ex U.S. High Dividend Yield Equity ETF HDAW – Yield 6.78%; YTD: Up 3.4%
The underlying MSCI ACWI ex-USA High Dividend Yield Index tracks the performance of equity securities in developed and emerging stock markets. Europe takes 49.37% of the fund, followed by Asia (39.64%). The fund charges 20 bps in fees.
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Franklin International Low Volatility High Dividend Index ETF (LVHI): ETF Research Reports
Global X SuperDividend U.S. ETF (DIV): ETF Research Reports
Global X SuperDividend ETF (SDIV): ETF Research Reports
Invesco KBW High Dividend Yield Financial ETF (KBWD): ETF Research Reports
Xtrackers MSCI All World ex US High Dividend Yield Equity ETF (HDAW): ETF Research Reports
