While there may never be a "Pokemon" or "Elmo" ETF, we are starting to see some humor in the naming of these funds. Just look at the recently listed Claymore/Zacks Yield Hog ETF ( CVY).

In case it is not clear, the fund seeks yield and is going after the existing dividend ETFs. The prospectus states that in addition to domestic common stocks, the Yield Hog will invest in ADRs, REITs, master limited partnerships, closed-end funds and preferred stocks. This already makes it a different animal -- the other dividend ETFs own stocks, period.

The first inclination might be to conclude that CVY will not appreciate in value because of its willingness to take in things like preferred stocks and closed-end bond funds, which typically trade in a very narrow price range.

However, according to Claymore, the Zacks Yield Hog Index, the index underlying CVY, "selects companies with potentially high income and superior risk-return profiles ... the objective is to outperform on a risk-adjusted basis the Dow Jones U.S. Select Dividend Index, which underlies the iShares DJ Select Dividend Fund ( DVY)."

Results of a back test of the fund (which began trading on Sept. 21) vs. the Dow Jones U.S. Select Dividend Index illustrate that the Yield Hog index enjoys significantly higher total returns over five years (16.37% vs. 11.00%); three years (19.3% vs. 15.38%); one year (10.32% vs. 8.79%) and year to date through Aug. 31 (12.13% vs. 9.57%).

As the chart below shows, $10,000 invested in the Yield Hog index would have easily outpaced the same amount held in the Select Dividend index over the five-year period from 2001 to 2006.

Claymore says it cannot be specific about yield, but it has set a general goal of doubling the yield of the existing stock-dividend ETFs.

DVY yields 3.38%, the PowerShares High-Yield Dividend Achievers Fund ( PEY) yields 4.25%, the streetTRACKS SPDR Dividend Fund ( SDY) yields 2.91% and the WisdomTree High-Yielding Equity Index Fund ( DHS) yields 3.96%.

Taking those figure into account, the Claymore fund could yield between 6% and 8%.

According to the fund's most recent literature, there are 147 holdings in the Yield Hog's portfolio. Two of the top three holdings are covered-call closed-end funds: the ( BEP) S&P 500 Covered Call Fundand the ( RCC) Small Cap Premium Dividend and Income Fund. Both of these holdings have slightly more than a 1% weighting each in the fund.

In scanning the list of holdings, I see such things as an emerging-market debt fund, Pfizer ( PFE), PetroChina ( PTR) and Nationwide Health Properties ( NHP). This is a very diverse mix indeed.

CVY's price-to-earnings ratio is 11.13, compared to 14.71 for DVY; its price-to-book of 1.68 is also lower than DVY's 2.62. I might take this data with a grain or two of salt because of some of the unusual holdings in CVY.

In addition, the betas are very similar: 0.87 for CVY and 0.85 for DVY. Finally, according to the Claymore literature, CVY's standard deviation (also a measure of volatility, where a lower number indicates less volatility) of 12.52 is slightly lower than DVY's 12.72.

For investors willing to include a dividend ETF in their large-cap allocation as a way of introducing yield, this fund has the potential of being a better mousetrap.

I would not, however, buy the Yield Hog just yet. In general, I like to give something a few months of trading to get a feel for what it will do on a day-to-day basis. At a minimum, this fund merits serious consideration.

At the time of publication, Nusbaum was long DVY as a client holding, although positions may change at any time.

Roger Nusbaum is a portfolio manager with Your Source Financial of Phoenix, Ariz., and the author of Random Roger's Big Picture Blog. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Nusbaum appreciates your feedback; click here to send him an email.

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