I had an article publish on TheStreet.com yesterday about the Yield Hog ETF from Claymore. I don't usually mention the articles I write for TSCM but this fund is interesting and unique. As a client said he likes the idea, as I mention in the article, of letting it age a little bit but my initial reaction is positive.
The fund owns stocks, closed end funds, ADRs, preferred stocks, MLPs, pretty much anything. It is simply trying to capture yield where it can find it. The plus to this is that the product is intended to yield double what the other dividend ETFs yield. The negative is that it may be difficult to incorporate into a diversified portfolio because it really is a hodge podge of holdings.
The back tested results are outstanding. I will be curious to see if the fund can live up to the back test.
Proud Member Of
Random Roger
© 2009 | Gadget Theme Blogger Template
Original WPtheme By Blogger Template | Converted By Gadget Lover
| Distributed by eFree Blogger Help
Original WPtheme By Blogger Template | Converted By Gadget Lover
| Distributed by eFree Blogger Help
2 comments:
Roger..what about combining cvy with ffc as part of an allocation to generate income? FFC may be more specialized. If this combo appeals to you, what percentages would you apply to each ..totalling 100....expanding the field..if this makes sense...what about adding DBV...as a third element in this allocation category? Personally, I am in the early stages of constructing an etf portfolio. I would like some dividend positions, but they seem like they've gone parabolic..waiting for a better entry. Meanwhile, these new items have captured my interest. Patience may be in order.
I don't know FFC first hand. I checked it out on ETFconnect, it is a CEF that is 80% in preferred stocks. It yields 7.5% so there it looks like there is some leverage.
Where preferreds are concerned I generally prefer individual issues. If rates spike up, like say if the yield curve normalizes, the market price could fall much more than the NAV.
If you like the fund I would say that CVY, FFC and DBV are likely to react differently to the good and the bad that may come along. It does not seem like CVY has a lot of interest rate sensitivety in the history of the back test but as I said in the post we'll see if the results live up to the back test.
I think the thought process of the reader is on the right track.
Post a Comment