VIG (Vanguard Dividend Appreciation ETF) follows the Broad Dividend Achievers Index which features constituents with a history of increasing dividends. It was launched in April 2004, has AUM of $6.4 billion and an average daily trading volume of just below 700K shares. The expense ratio is .18%. As of March 2011, VIG returned 4.19% YTD. The current quarterly dividend is $.27 which provides a yield of around 2%.

Data as of June 2011

VIG Top Ten Holdings & Weightings

  1. ConocoPhillips (COP):                                     4.45%
  2. Chevron Corporation (CVX):                4.38%
  3. Coca-Cola Company (KO):                   4.09%
  4. ExxonMobil Corporation (XOM):          4.07%
  5. United Technologies Corp (UTX):       3.96%
  6. McDonald's Corporation (MCD):          3.95%
  7. IBM Corp (IBM):                                  3.91%
  8. PepsiCo, Inc. (PEP):                            3.79%
  9. Procter & Gamble Company (PG):       3.71%
  10. Caterpillar Inc. (CAT):                          3.67%

 

IYR (iShares Dow Jones U.S. Real Estate ETF) follow the index of the same name and was first issued in June 2000. AUM is just under $3 billion while average daily trading volume is nearly 8M shares. The expense ratio is .48% and the quarterly dividend is $.50 making for a yield of around 3.3% which is low given the higher risk for the sector. This is chiefly due to most assets consisting of REITs (Real Estate Investment Trusts) which are much more volatile and economically sensitive. It's said that over the next 5 years REITs have $3 trillion in outstanding debts due or refinance. Nevertheless, IYR has returned 6.25% through March 2011.

A competitive choice would be VNQ (Vanguard REIT ETF) which was launched September 2004 and tracks the MSCI U.S. REIT Index. AUM equal $9.2 billion and average daily trading volume is 1.8M shares. The current dividend is $.41 which makes the yield roughly 2.75% based on prices as of June 2011. The expense ratio is a low .12%.

Data as of June 2011

IYR Top Ten Holdings & Weightings

  1. Simon Property Group, Inc. (SPG):                 8.32%
  2. Vornado Realty Trust    (VNO):                        4.26%
  3. Equity Residential (EQR):                                4.21%
  4. Public Storage (PSA):                                      4.01%
  5. Boston Properties, Inc. (BXP):                                     3.61%
  6. Annaly Capital Management, Inc. (NLY):          3.46%
  7. HCP, Inc. (HCP):                                             3.39%
  8. Host Hotels & Resorts, Inc. (HST):                  2.82%
  9. Weyerhaeuser Company (WY):                       2.77%
  10. AvalonBay Communities, Inc. (AVB):                2.73%

RWX (SPDR Wilshire International Real Estate ETF) tracks the Dow Jones Global ex-U.S. Real Estate Securities Index which basically consists of REITs in developed and emerging markets. It was launched in December 2006. AUM exceeds $2.6 billion while average daily trading volume is over 385K shares. The current quarterly dividend is $.19 making the dividend yield only 1.85%. From our view this is too low a yield given risks inherent in the real estate sector. Nevertheless, as of May 20011 YTD return has bend 5.20%. Shares overseas may benefit or lose given currency fluctuations which are an additional consideration.

Data as of June 2011

RWX Top Ten Holdings & Weightings

  1. Westfield Group (WDC):                                  6.95%
  2. Unibail-Rodamco Se (UL):                               6.39%
  3. Brookfield Asset Management (BAM):            5.69%
  4. Mitsui Fudosan Co., Ltd. (8801):                     4.59%
  5. Land Securities Group PLC (LAND):               3.26%
  6. Hong Kong Land Holdings Ltd. (H78):            2.81%
  7. British Land Co PLC (BLND):                           2.70%
  8. Westfield Retail Trust (WRT):                          2.54%
  9. Hang Lung Properties Ltd. (00101):                2.54%
  10. Link Real Estate Investment Trust (00823):     2.36%

 

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