I want to find some good ETFs/ETNs/CEFs to ease into. Got plenty of stock based stuff, but hardly any yield based stuff. Anyone have any favorites here, whether they are bonds based, preferred stock based, REIT based, etc. etc.? I'll do some testing versus other things and post results for discussion if I can. Thanks!
Thanks ph1l. I'll take a look. Have any experience holding any of those? I've noticed that a lot of high yield ones, and a lot of CEFs that have decent yields, have massive price decays over time. That is (in part at least) because they are just returning their capital, i.e. distributing more than just earnings - returning your investment. Sometimes I'll test one with a [8%] yield, but over time it might have gained (taking that yield into account) only [1%] per year. In which case the security price decline almost totally offsets the yield, which makes holding the security relatively pointless.
These authors will give you plenty ideas. I often check the comments below more than reading the articles. https://seekingalpha.com/author/rida-morwa/ https://seekingalpha.com/author/brad-thomas/
I can tell you from experience that there is no free ride with these high-yielding ETFs/ETNs. They can be heavily impacted by market forces and gyrations, including their sector issues. So don't throw everything you have at them. Always, always, high returns equates to high risk when holding anything long term.
%% VEA + VWO..................... I liked those earlier, never held them long enough for a dividend as far as i know/LOL Good liquidity, but i never choose for dividend yield
SDEM: MSCI SuperDividend Emerging Markets ETF. 8% yield with rock bottom valuations. You'll be subject to FX risk, but it's likely that will serve as a tailwind over the next few years.
ILF - this looks more like an equity fund to me, although it does have significant dividend payments. Latin America focused. It began trading 10/26/2001. 100% of your account in ILF starting on that date would have obtained you an IRR of 8.22% against a max drawdown of 67.48% (ouch!), for a return to max DD ratio of 12.18%. Compare that to SPY over the same period - its numbers are 8.34%, 55.19%, for a ratio of 15.11%. SPY beats it, although many may like its very big payouts over time, and if the dollar depreciates against other currencies ILF would probably do much better. Is there a way to see what the dollar was versus other currencies, on average (or maybe versus Latin American currencies, on average, to be more precise), back in 10/26/2001 versus what it is today? We could then see what its results were putting currency changes aside. REM - this looks like a mortgage REIT ETF It began trading on 5/4/2007. Its numbers over time are HORRIBLE. Its IRR if you had bought it at its inception would be a negative 2.37%, with a max drawdown of 74.73%. Horrible. However, it got caught in the 2008 mortgage crises. Let's say you were able to buy at or around its low after that. Let's say you bought it at the close on 3/5/2009 for an (adjusted) price of 9.83. Your IRR would still only be 6.98%, and max DD of 68.52%. Compare that to SPY return of 15.80% 33.72% max DD over same period. Ouch. REM looks to me like something to avoid for long term holding.
VEA started trading 7/26/07. Buying then would have an IRR of only 3.67%, versus a max DD of 60.69%. Compare that to SPY numbers of 10.26% of 55.19%, respectively, over same period. VEA = no bueno. VWO started trading 3/10/2005. Its numbers based on that date are a bit better, 5.43% and 67.68%. But compare that to SPY over same period, being 9.08% and 55.19%. VWO also looks like a poor choice. Yield on VEA and VWO are far from great, as well. Stay away from those IMO.