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Triple Play for Global Income
07/08/2014 10:00 am EST
With bond interest rates remaining at record lows and concern over rising inflation, investors are hungry for higher yields and have developed a keen appetite for collecting dividends, suggests Carl Delfeld in Wealth Daily.
Dividend-paying stocks provide a consistent stream of income, with the bonus of lower risk compared to high-growth stocks. Importantly, don’t forget to look overseas in putting together your dividend-rich portfolio.
Exchange-traded funds have made putting together a low-cost basket of dividend companies a snap. Here is a global triple play that will supersize your dividend income.
First, look at the Global X Super Dividend ETF (SDIV), which tracks the performance of 100 equally weighted companies that rank among the highest dividend-yielding equity securities in the world.
SDIV provides good diversification with exposure to REITs (22%), consumer discretionary stocks (16%), telecommunications (16%), financial services (10%), utilities (8%), banks (5%), consumer staples (5%), energy (5%), industrials (5%), insurance (3%), technology (3%), and health care (2%).
About 32% of the companies in the basket are based in the US, 24% in Australia, 10% in Great Britain, 6% in Canada, and 4% in Singapore, among others.
Second, add a dash of one of my long-time favorite ETFs, the PowerShares International Dividend Achievers (PID).
To get into this exclusive basket, companies have to have a record of increasing dividends for five consecutive years. The United Kingdom and Canada make up 50% of its holdings, with the US at only 6%.
Finally, to get more Asia and emerging market exposure, blend in some of WisdomTree Emerging Market Equity Income ETF (DEM).
DEM has 20% exposure to Taiwan, as well as 20% to Brazil. Telecom companies make up a majority of the companies in this basket, and you can expect it to distribute dividend income in the area of 5% annually.
With this global triple play, your stock portfolio will get a welcome shot of income.
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