Dividends4Life: High-Yield ETFs For Big Dividends

High-Yield ETFs For Big Dividends

Posted by D4L | Thursday, January 31, 2013 | | 0 comments »

The hunger for dividend stocks and high-yield investment continues. But unfortunately, many investors shoot themselves in the foot by seeking out big dividends without understanding the risks. Take RadioShack (RSH -5.28%). The struggling electronics retailer is clearly circling the drain, but last summer boasted a 12% dividend yield if you annualized 12.5 cents on a share price just north of $4. Unfortunately, it eliminated its dividend, and shares have now fallen over 40% to boot.

Chasing yield this way is dangerous. But a simple alternative can give you exposure to a basket of high-income equity investments like this and mitigate your risk. Those plays are high-dividend exchange-traded funds that include the Market Vectors Preferred Securities ex Financials ETF (PFXF -0.18%), the PowerShares High Dividend Yield Financial Portfolio ETF (KBWD +0.20%) and the Global X SuperDividend ETF (SDIV +0.78%). None of these are junk bond funds, mind you, and all have high-dividend equities behind them. But be careful, do your research and trade carefully because they are on the small side when it comes to volume and assets under management.

Source: MSN Money

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