Increasing Income with iShares Dividend ETFs

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.

This week we continue our theme of discussing key providers of exchange-traded funds (ETFs). Among the broad spectrum of ETF providers, a company that stands out for the breadth of its offerings is iShares, the ETF investment arm of the world’s largest asset manager, Blackrock (BLK).

iShares has more than 600 funds globally that give investors exposure to equities, fixed income and commodities. iShares also has funds that trade on 20 exchanges worldwide, featuring ETFs that focus on specific geographic areas, such as individual countries and regions.

In addition, iShares offers basic index ETFs, but it also features ETFs employing niche investment strategies, such as actively managed funds designed for specific allocations and funds devoted to dividends.

An example of the company’s niche funds is the targeted High Dividend Equity Fund (HDV), which features U.S. blue chips that pay high dividends. Last year, this fund had a 23.59% return, reflected in the chart below. However, it has suffered a correction this January along with the rest of the market.

HDV_020514

The fund’s 2013 yield was an enticing 3.17%. iShares also offers four other ETFs with a dividend-based approach: Asia / Pacific Dividend 30 Index Fund (DVYA), Dow Jones Select Dividend Index Fund (DVY), Dow Jones International Select Dividend Index Fund (IDV) and Emerging Markets Dividend Index Fund (DVYE).

iShares also creates funds based on multiple indexes in the same area of investment. For example, the market capitalization ETFs of iShares are built on indexes from Standard & Poor’s, Morningstar and Russell, rather than dedicating its funds to just one company’s indices.

Exclusive  A Brief History of Exchange-Traded Funds

Because of its wide inventory of ETF products, iShares can address the needs of a variety of investors. The company’s multiple products exploit the flexibility and value of the ETFs, providing specific levels of risk and exposure to particular industries with a high degree of transparency and ease of acquisition. I have recommended a number of iShares funds.

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful Investing newsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

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Monday’s steep 300-plus point drop in the Dow sent the most widely watched measure of the equity market plunging below its long-term support at the 200-day moving average.

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