There are nearly 350 individual ETF options offered through the iShares-branded family of funds. The list below includes four of the best dividend ETFs in terms of yield and total return over the past 12 months, explains Ned Piplovic, income specialist and editor of DividendInvestor.
iShares MSCI Global Energy Producers ETF (FILL)
Based on the MSCI ACWI Select Energy Producers Investable Market Index, this fund seeks investments in companies primarily engaged in the business of energy exploration and production. Within the energy sector, the fund focuses primarily on companies that engage in the exploration and production of oil and gas, as well as the production and mining of coal.
As of October 26, 2018, the fund had nearly $45 million in assets distributed over 213 individual holdings. While the fund invests in companies engaged in exploration of multiple energy sources, oil & natural gas companies dominate the bulk share of total holdings and assets.
From a geographical diversification aspect, nearly half of the fund’s assets — more than 47% — remain invested in U.S. companies. An additional 17% is in the United Kingdom and 7% in Canada. Aside from these three countries, which account for more than 70% of assets, the fund’s remaining assets are spread across nearly 10 additional countries around the world.
The fund’s current annual distributions yield more than 3% and the unit price grew as well to offer a combined total return of 7.7% over the past 12 months and nearly 24% over the past three years.
With only two distributions per year, the fund’s next declaration should occur just after the middle of December with ex-dividend and pay dates scheduled just prior to the end of December 2018.
iShares Global Energy ETF (IXC)
Like the previous fund on this list, this fund tracks an energy sector index, but has significantly higher net assets of nearly $1.4 billion spread across 73 total holdings. More than half of this fund’s assets — 53% — are invested in U.S. companies, with an additional 16% invested in U.K. companies and nearly 10% in Canadian companies.
In addition to the oil and natural gas producing companies, this fund also holds assets in energy storage, transportation refining, marketing, equipment and supporting services.
The fund’s current distribution yields 3.1% and the total return over the past year is 4.1%. The total return over the past three years was more than four-fold higher at nearly 17%.
Since its inception, the fund experienced two periods of declining value — during the 2008 financial crisis and from 2014 to 2015 when the crude oil prices receded from the peak of nearly $140 per barrel. However, the fund’s total value rose nearly 50% since January 2016.
iShares Core High Dividend ETF (HDV)
Based on the Morningstar Dividend Yield Focus Index, this fund seeks investments in companies that generally pay higher-than-average dividends. As of October 26, 2018, the iShares Core High Dividend ETF had more than $6 billion in assets distributed over 75 individual holdings.
The Energy (21.8%), Consumer Staples (21%) and Health Care (21%) sectors dominate the fund’s share of total assets and combine for almost 64%.
Since its formation in 2011, the fund failed to increase its total annual distribution only in 2016. However, the total annual distributions advanced 30% over the past two years. Since inception, the fund tripled its total annual distribution payout, which corresponds to a 17.3% average annual growth rate.
While the fund’s unit price encounters occasional volatility, the long-term average growth trend is quite steady. The fund’s current 3.6% yield is 4% higher than the 3.5% average yield over the past five years. Combined with share-price appreciation, HDV has produced a 4.5% total return over the past 12 months. The total returns over the past three and five years were significantly higher at 27% and 45%, respectively.
iShares Commodities Select Strategy ETF (COMT)
This ETF focuses on offering investors broad exposure to commodity investments through futures and commodity producer’s stocks. As of October 26, 2018, the fund’s 196 individual holdings totaled nearly $740 million in total assets. Cash and equity investments are approximately 83%, with cash accounting for more the than half of the ETF’s total assets.
The fund’s current annual distributions yield 5.5%. Despite a 6% drop during October 2018 along with the overall market pullback, the unit price is still 2.2% higher than one year earlier. The combined total return over the past 12 months is above 11% and more than 22% over the past three years.
