Dividend Income ETFs ??

lindq · Mar 25, 2019

On behalf of a family member who needs income and has a good sized account, I'm looking for the first time at high dividend producing ETFs. (PGX, PFF, etc.)

(And considering protecting the market downside with some 3x inverse ETFs in the same sectors, in the hope of neutralizing market risk.)

I'd love to hear from anyone with experience playing in the dividend ETF space.

Cautions? Thoughts? Appreciated.

dozu888 · Mar 25, 2019

lindq said:
On behalf of a family member who needs income and has a good sized account, I'm looking for the first time at high dividend producing ETFs. (PGX, PFF, etc.)

(And considering protecting the market downside with some 3x inverse ETFs in the same sectors, in the hope of neutralizing market risk.)

I'd love to hear from anyone with experience playing in the dividend ETF space.

Cautions? Thoughts? Appreciated.

in this environment everyone is desperate for yields... 10 year is at 2.5%, corporate investment grade 3.5%, junks at 5.5% but if you consider default it's more like 4.5%

if junk is yielding 5.5%, but AAPL is forward yielding 6.7%.... is there something wrong with this picture?

people want what they want... but valuation is so out of whack now.. bonds are too risky... imagine what if 10 year goes from 2.5 to 5%

R1234 · Mar 25, 2019

lindq said:
On behalf of a family member who needs income and has a good sized account, I'm looking for the first time at high dividend producing ETFs. (PGX, PFF, etc.)

(And considering protecting the market downside with some 3x inverse ETFs in the same sectors, in the hope of neutralizing market risk.)

I'd love to hear from anyone with experience playing in the dividend ETF space.

Cautions? Thoughts? Appreciated.

I've backtested things like that where I hold something like PFF and hedge with an inverse ETF. For whatever reason that strategy looks like crap. If I get time I will upload a screenshot.

Maverick2608 · Mar 25, 2019

lindq said:
On behalf of a family member who needs income and has a good sized account, I'm looking for the first time at high dividend producing ETFs. (PGX, PFF, etc.)

(And considering protecting the market downside with some 3x inverse ETFs in the same sectors, in the hope of neutralizing market risk.)

I'd love to hear from anyone with experience playing in the dividend ETF space.

Cautions? Thoughts? Appreciated.

Do you have to pay 3 times the dividend in the 3 x inverse ETFs?

murray t turtle · Mar 25, 2019

lindq said:
On behalf of a family member who needs income and has a good sized account, I'm looking for the first time at high dividend producing ETFs. (PGX, PFF, etc.)

(And considering protecting the market downside with some 3x inverse ETFs in the same sectors, in the hope of neutralizing market risk.)

I'd love to hear from anyone with experience playing in the dividend ETF space.

Cautions? Thoughts? Appreciated.

%%
DVY worked well for semi liquid ETFs; if only one knows the difference between selling + panic selling //flash crash LOL

qwerty11 · Mar 25, 2019

lindq said:
(And considering protecting the market downside with some 3x inverse ETFs in the same sectors, in the hope of neutralizing market risk.)

Cautions? Thoughts? Appreciated.

But longing the 3x bear ETF would be very expensive? Although the volatility is low it still decays quite a bit. Plus management fees of maybe 1%? Isn't that killing your yield?

lindq · Mar 25, 2019

qwerty11 said:
But longing the 3x bear ETF would be very expensive? Although the volatility is low it still decays quite a bit. Plus management fees of maybe 1%? Isn't that killing your yield?

Something to consider.

sle · Mar 26, 2019

dozu888 said:
people want what they want... but valuation is so out of whack now.. bonds are too risky... imagine what if 10 year goes from 2.5 to 5%

Sadly, it's more likely that it goes to 0.5% like in Japan, that's where the risk is.

murray t turtle · Mar 29, 2019

Maverick2608 said:
Do you have to pay 3 times the dividend in the 3 x inverse ETFs?

%%
NO; generaly speaking-they pay you- if noted in annual report.
SOME inverse[bear] + up trending bull 3x ETFs pay dividends believe it or not. NOT all do ; it may be 1% or 2%/+............................................................................................... BUT in a sideways slop chop [aka barbed wire range], they may [bull or bear] lose money while the cash ETFs would gain a bit due to dividends + stuff........ :caution:

murray t turtle · Mar 29, 2019

R1234 said:
I've backtested things like that where I hold something like PFF and hedge with an inverse ETF. For whatever reason that strategy looks like crap. If I get time I will upload a screenshot.

%%
NO wonder; the way that was worded, people seldom make money off buying insurance; unless you are a insurance dealer/broker. 3x ETFs are not @ all designed to be like a 52 week insurance policy.
However when I buy insurance, I tend to under insure a bit-i'm more careful that way; except liability insure for auto.... Its so cheap+ so if one ever needs that; you really need it