This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

New Multi Asset Fund Goes Global In Search of Yield

NEW YORK ( TheStreet) -- ETF investors want products with high yields and fund providers are working to meet that demand with what they hope are innovative and effective products.

First Trust has participated in this segment starting with its Multi Asset Diversified Income Index Fund (MDIV) which began trading just over a year ago.

MDIV allocates 25% to dividend paying common stocks, 20% each to real estate investment trusts, preferred stocks and MLPs and 15% into the iShares iBoxx High Yield Corporate Bond ETF (HYG). In the first four categories MDIV uses individual issues and the one ETF for high yield bonds. MDIV has paid out $1.02 in dividends since its inception making for a 5.05% trailing yield but as is the case with all ETFs any future yield could differ from trailing yields.

MDIV has attracted $487 million in assets which makes it successful from First Trust's perspective as a fund provider. Building on that success the company recently launched the International Multi Asset Diversified Income Index Fund (YDIV).

The structures of the two funds are very similar. YDIV allocates 25% to dividend paying foreign stocks, 20% each to non-US REITs, non-U.S. preferred securities and non-U.S. infrastructure companies with the final 15% allocated to the iShares JP Morgan USD Emerging Markets Bond ETF (EMB). Again the first four categories are primarily individual issues with the bond component being an ETF.

YDIV has a surprisingly large allocation to Canada at 36% of the fund. Singapore and the UK also feature somewhat prominently in the fund at 7% and 6% respectively.

The United States and Canada obviously do a lot of trade with each other and the economies are closely aligned. The huge exposure to Canada may make the fund less effective as a diversifier than it otherwise could be if the underlying methodology limited country exposure to 10%. There is plenty of yield to be had in other countries. Australia is typically a higher yielding country for example but only has a low single digit weight in YDIV.

Both MDIV and YDIV have relatively little exposure to the bond market which is a positive attribute if rates are headed higher as it appears is the case but the other asset classes in the funds can still be interest rate sensitive.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
HYG $83.50 0.04%
AMLP $12.12 -0.74%
PFF $39.04 0.11%
IPFF $17.25 -0.49%
YDIV $17.22 -0.44%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs