The stocks in the S&P 500 Index (^SPX) are divided into 11 business sectors. State Street ETFs let investors target which sectors they believe have the best return potential. Now, the firm has also started offering Premium Income versions of those funds – like the State Street Financial Select Sector SPDR Premium Income ETF (XLFI), highlights Tim Plaehn, editor of The Dividend Hunter.
For stocks this year, there has been a wide range of returns across different sectors. Year-to-date returns have ranged from negative-5.3% for communication services to positive-32.2% for energy.
State Street Financial Select Sector SPDR Premium Income ETF (XLFI)
Source: TradingView
If you follow my analysis and writings, you know my focus is on income investments, generally high-yield investments. The income funds use covered call strategies to pay significant yields.
The XLFI has a distribution yield of 11.2%, compared to 1.4% for the State Street Financial Select Sector SPDR ETF (XLF). The State Street Health Care Select Sector SPDR Premium Income ETF (XLVI) yields 11.7%, compared to 1.5% for the State Street Health Care Select Sector SPDR ETF (XLV).
If you want to play market sectors, the high-yield versions of the Select SPDRs offer attractive yields, leveling out the potential returns.
