Tap Dividend and Income Payouts with Multi-Asset Fund

Doug Fabian

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

There are many approaches for those seeking high-dividend-paying investments. Some people might want high or rising dividend opportunities specifically, while others may choose investments that also are likely to appreciate in share price.

For those who crave direct payouts, iShares Morningstar Multi-Asset Income ETF (IYLD) is an exchange-traded fund (ETF) that generates income with added stability.

This fund does not tend to fluctuate much in value because it invests about 60% of its assets in bond ETFs. Another 20% of its assets go into high-dividend-paying ETFs and the last part is invested in “alternative assets,” which currently consist primarily of a real estate/mortgage fund. The inclusion of all these asset classes in one investment is part of this fund’s appeal. Another plus is its 5.08% yield, which is paid out as a monthly dividend.

This is not a tremendously large fund, with $286 million in assets managed, though many of the ETFs it invests in are much larger. This fund’s year-to-date, per-share pullback of 2.19% does not include its dividend payments. Although the chart below looks bumpy, the price trajectory now appears to be on the rise again.


This fund’s holdings consist of nine other ETFs. The five largest are iShares iBoxx USD High-Yield Corporate Bond ETF (HYG), 20.19%; iShares iBoxx USD Investment Grade Corporate Bond Fund (LQD), 15.02%; iShares Mortgage Real Estate Capped ETF (REM), 14.81%; iShares International Select Dividend ETF (IDV), 10.13%; and iShares Emerging Markets Local Currency Bond ETF (LEMB), 10.08%.

If you think this mixture of asset classes would enhance your portfolio, you may want to explore a potential investment in iShares Morningstar Multi-Asset Income ETF (IYLD).

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful ETF 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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In case you missed it, I encourage you to read my e-letter column from last week about an international dividend ETF. I also invite you to comment in the space provided below.

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MSCI Inc., whose MSCI Emerging Markets Index is the most widely tracked benchmark of share-price performance outside the developed world, said it would add China A-shares to the index -- just not quite yet.


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