The yield on two-year US Treasuries hit 4.167% on Friday. The yield on the 10-year US Treasuries reached 3.762%. This allows the yield curve to stay in an inverse relationship, which usually indicates a recession.
According Real information, the spread between dividend yields and bond yields has widened the most in the past twelve years and is pointing to the upside as Federal Reserve policy remains hawkish. See below:
“Evaluation Flash”#TINA left! pic.twitter.com/loG9MPTmL6
— True Insights (@true_insights_) September 28, 2022
As investors seek high yields to protect their portfolios for passive income, more investors may turn to bond markets as the dividend yield of stocks is not up to par. These dividend-yielding exchange-traded funds aim to deliver high returns, so an investor doesn’t have to look to the risk-free rate.
See also: China gives lightning-fast approvals to 5 new ETFs amid market rout and Sino-US tech war
- SPDR Series Trust SPDR Portfolio S&P 500 High Dividend ETF SPYD offers a dividend yield of 5.67% or $2.03 per share per year, through quarterly payments, with a spotty track record of increasing its dividends. SPDR Portfolio S&P 500 High Dividend ETF tracks an index that attempts to select the top 80 dividend-yielding companies in the S&P 500. SPYD does a great job of diversifying its portfolio across most segments of the economy, as its top position is in Cardinal Health Inc. HACrepresenting 1.66% of the fund.
- SPDR S&P Global Dividend ETF WDIV offers a dividend yield of 5.93% or $3.18 per share per year, making quarterly payments, with an inconsistent history of increasing its dividends. The SPDR S&P Global Dividend ETF seeks to provide investment results which, before fees and expenses, generally correspond to the total return of the S&P Global Dividend Aristocrats Index. The index includes the top 100 qualified stocks with the highest indicated dividend yields, with no more than 20 stocks selected from each country and 35 stocks from each global industry classification standard sector.