Triple Play for Global Income

07/08/2014 10:00 am EST


Carlton Delfeld

Editor, The La Jolla Letter and Pacific Gains

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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