These Fat 9% to 24% ETF Yields are Traps

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I told you that the Infracap MLP ETF (AMZA) was a dog. Well, the fund just cut its dividend by 37%.

This is one of the biggest ETF payout cuts in recent memory, and it’s a gut punch to shareholders who rode out massive underperformance for the income tradeoff. That payout mattered. Just look at the difference between price returns and total returns in the chart below:

Just because a yield is wrapped in a fancy ETF wrapping doesn’t mean it’s safe.

This ETF dividend slash could be the first of several. So let’s talk about three ETFs – which pay between about 9% and 24% – whose dividends are far from secure.…
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Exchange-traded funds (ETFs) offer “one-click” diversification. Investors buy ETFs to hedge against individual stock collapses.

ETFs can also offer big yields. We’ll look at 11 of them today, with dividends starting at 4% and climbing all the way up to an amazing 21%!

Is the 21%er a trap? Of course it is. But my favorite double-digit payer isn’t – in fact, its 10% payout is secure and spectacular. But this “last safe 10% yield” won’t last long – they never do!

So read on to learn about my best income buy as we round out today’s diversified dividend dozen.

Guggenheim Shipping ETF (SEA)
Dividend Yield: 4%

The Guggenheim Shipping ETF (SEA) invests in a bundle of companies with shipping operations across the world.…
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About Author

Brett

Hi, I’m Brett Owens – and I’m a financial junkie. My “problem” started incollege, when I got a little dose of the stock market – man, was I hooked…in no time, I was reading the Wall Street Journal religously.

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