The Right ETF Strategy – and the Right Time to Use it

When it comes to investing, success is often a matter of timing. Buying a great investment at the wrong moment can lead to losses. So can implementing the “right” strategy at the wrong time.
But when you have the right strategy AND the right time to use it? That’s pure investment gold. And my research shows a proper dividend-focused strategy – implemented right now – has both.
I don’t know how much of a student of market history you are. But the facts and figures I’ve seen are irrefutable: Dividends comprise the lion’s share of an investor’s return over long periods of time.
One study that covers more than two centuries of data found that average annual returns in the U.S. are around 7.9%. But a whopping 5.8 percentage points of that stemmed from dividend payouts and dividend growth. A separate analysis found that since 1900, dividends accounted for around 90% of total real returns across multiple world markets and multiple decades.
Not only do dividends boost returns dramatically, but they also lower overall portfolio risk and volatility. One reliable analysis found that a proper dividend-focused investment strategy can reduce portfolio swings and volatility by more than a third.
But here’s the best thing: Now is a great time to put a yield-focused strategy to work for you. That’s because multiple historical analyses suggest this is the point in the Federal Reserve rate-hiking cycle where dividend payers start to outperform … and continue to do so for years.
In other words … like I said at the outset … a yield-focused approach is the right investment strategy at the right time. I’m going to have much, MUCH more on this topic soon. That includes details on how I pick the best higher-yielding investments, what timing and analysis tools come into play, the impact of Fed policy on dividend-paying stocks and funds, and more.
But to get you started, here’s a special High-Yielding ETFs Screener I created at the Weiss Ratings website. The SPDR S&P 500 ETF (SPY, Rated “B”) is currently yielding around 1.9%. So I started by screening for all ETFs that yield at least twice that amount, or 3.8%. They had to do so on both a historical and forward basis.
Next, I eliminated any ETFs with less than $100 million in assets and Weiss Ratings below “C-” (HOLD). I also cut out ETFs with negative returns over the past 12 months and year-to-date. The resulting list shows the results of this screen as of mid-week:

The Global X SuperDividend ETF (SDIV, Rated “C”) came in first place. The $895 million ETF invests in a basket of higher-yielding, foreign and domestic stocks. That includes mortgage insurers, banks, REITs, shipping firms, and more. It sports a dividend yield of around 6.7%.
Other top-10 ETFs include the Arrow Dow Jones Global Yield ETF (GYLD, Rated “C-”), a passively managed ETF that invests in a blend of foreign and domestic stocks and bonds, and the VanEck Vectors BDC Income ETF (BIZD, Rated “C”).
If you’re looking to get started enhancing the yield of your portfolio, take a look at my screener and see what might work for you. Then stay tuned for more updates on this very important topic.