Dividend investing can be tricky if investors don't know which stocks or funds to buy. Should investors go for a higher yield? How important is dividend growth? Will the investor need this money for retirement, or do they have a big expense coming up? All of these questions pop up for investors, and if an investor doesn't have money for a financial advisor, it can be difficult to know where to turn.
That's where the Amplify YieldShares Prime 5 Dividend ETF (PFV) comes in. Created by Amplify Investments, which has almost $120 million in assets under management, this exchange traded fund seeks to make it easier for regular investors and take the guesswork out of dividend investing.
Amplify's founder and CEO Christian Magoon said there are two elements to the newly created ETF -- it automates a highly diversified ETF portfolio to take the guesswork out and it reduces trading costs. "The ETF wrapper provides significant cost benefits in both of these areas," Magoon said.
The fund, which was launched September 21, picks five dividend ETFs -- all based in the U.S. -- allowing investors to get high income, along with lower risk (or volatility), as well as a low expense ratio of 0.49%.
The fund is currently has a 21.09% weighting toward the iShares Core High Dividend ETF (HDV) , a 20.39% weighting toward Schwab US Dividend Equity ETF (SCHD) , a 19.85% weighting towards Vanguard High Dividend Yield Index Fund (VYM) , a 19.88% weighting toward Schwab US Large Cap Value ETF (SCHV) and an 18.56% weighting towards the WisdomTree High Dividend Fund (DHS) .
With the fund just launching, there is no official yield just yet, but the index had a 2.95% yield as of July 30 and the first distribution is set to come in December, when an official yield will come.
TheStreet recently sat down with Magoon to discuss how the ETF makes investors lives easier and where he sees the world of dividend investing going.
TheStreet: The Federal Reserve seems likely to raise its federal funds rates in December. If it does, what is that likely to do to dividend stocks and ETFs?