Best dividend etf or fund with ~9% annual dividends

[boarder42]

Hey dividend gurus.

This is in response to trying to get my dad out of the awful AZNCX.

I can't convince him to go no dividend. So what do you have ?  I don't want a dividends aren't as good as just using vtsax. I know that he knows that. He wants dividends.

[NoStacheOhio]

VTSAX pays dividends, since many of the companies in the index pay dividends.

You could look at a dividend-focused ETF like DVY or HDV (or whatever similar your brokerage offers free trades on). What's the target yield?

[AdrianC]

There are no funds or ETFs giving regular 9% dividends.

AZNCX has a Distribution Yield of 10.22% by selling securities in the fund. The true yield is the SEC Yield of 2.87%.

[forummm]

There are no funds or ETFs giving regular 9% dividends.

AZNCX has a Distribution Yield of 10.22% by selling securities in the fund. The true yield is the SEC Yield of 2.87%.

Exactly. That's why the fund shares lose value over time. There is no mutual fund that pays that kind of a dividend without it being 1) VERY risky, and/or 2) selling its own assets. You could try VGSLX or VHDYX.

[Interest Compound]

There are no funds or ETFs giving regular 9% dividends.

AZNCX has a Distribution Yield of 10.22% by selling securities in the fund. The true yield is the SEC Yield of 2.87%.

Great catch. Boarder42, this is really all the evidence you need. This is the wording you can use:

"The fund managers behind AZNCX took a 2.87% dividend, turned it into 10.22% by selling securities in the fund, and charged you 2% for the privilege. Vanguard can do this for you, and the service is free! A monthly "dividend" straight to your checking account!"

[StressLess]

what about building a dividend index portfolio

Vanguard High Dividend Yield Index Fund Investor Shares (VHDYX)

Vanguard International High Dividend Yield Index Fund Admiral Shares (VIHAX)

and maybe a little bit of

Vanguard REIT Index Fund Admiral Shares (VGSLX)

[nobodyspecial]

A few REITs pay >8% but obviously you don't get 5x the return on treasury bonds with zero risk.

[Mighty-Dollar]

Annual Report Expense Ratio of this AZNCX fund is 2.07% !!!!!

Does he realize that index funds cost between about 0.05% and 0.07% ?

This fund also has an R-squared rating of 92.27. A rating in the 90's indicates that the managers are simply replicating the indexes. So he's paying 2.07% per year for the "privilege" of managers copying an index. Pointless!

He's throwing away money. Probably a commission-hungry "adviser" told him to invest in this fund. Did he not get the index fund memo?

[boarder42]

i think i've got him convinced to go with VTSAX or something at vanguard just need to sit down with him and help him set it up.  He has an "advisor" that put him in an allianz annuity and this same guy put him in this.  i'm never going to convince him the annuity is bad (nor do i want to) but at least i think he is seeing the light on this one.  but obviously if the guy put him in this the annuity he put him in is likely worse. 

[a1smith]

Take a look at PIMCO Dynamic Income, PDI.  It is a closed-end fund.  Has 10% distribution rate based on the regular monthly dividends but they also pay a special dividend in December.  Last year the special dividend more than doubled the annual distribution rate.  So, consider tax efficiency when contemplating which account to hold it in.

Morningstar rates them 5 stars, high return, average risk.  The fund is leveraged, about 48% right now.

Morningstar report

PDI dividend history

[frugledoc]

Financial advising as a profession really does seem to attract really devious people doesn't it?  Is it possible that they do not realise they are devious?

[hodor]

Take a look at PIMCO Dynamic Income, PDI.  It is a closed-end fund.  Has 10% distribution rate based on the regular monthly dividends but they also pay a special dividend in December.  Last year the special dividend more than doubled the annual distribution rate.  So, consider tax efficiency when contemplating which account to hold it in.

Morningstar rates them 5 stars, high return, average risk.  The fund is leveraged, about 48% right now.

Morningstar report

PDI dividend history

How does a fund that has 48% Leverage get "average risk"? I am all for leverage when used appropriately, wouldn't call it "average risk" however.

[forummm]

Financial advising as a profession really does seem to attract really devious people doesn't it?  Is it possible that they do not realise they are devious?

They are salesmen selling a product that is unquestionably worse than other products on the market. Like car salesmen, it's a certain kind of person that is attracted to and sticks with that kind of job--and can even make a lot of money doing it.

[Vagabond76]

Financial advising as a profession really does seem to attract really devious people doesn't it?  Is it possible that they do not realise they are devious?

They are salesmen selling a product that is unquestionably worse than other products on the market. Like car salesmen, it's a certain kind of person that is attracted to and sticks with that kind of job--and can even make a lot of money doing it.

Why does the seller have to be "devious."  Why not blame the greedy but uneducated person that thinks he or she is an "investor" but is really just a dumbass with a little extra cash?

[NoStacheOhio]

Financial advising as a profession really does seem to attract really devious people doesn't it?  Is it possible that they do not realise they are devious?

They are salesmen selling a product that is unquestionably worse than other products on the market. Like car salesmen, it's a certain kind of person that is attracted to and sticks with that kind of job--and can even make a lot of money doing it.

Why does the seller have to be "devious."  Why not blame the greedy but uneducated person that thinks he or she is an "investor" but is really just a dumbass with a little extra cash?

So you want to blame someone for being too ignorant to know that they're being exploited? This also isn't typically "a little extra cash," it's retirement savings. The money they're hoping to have when they stop working for one reason or another. Money that won't be there when they stop working. Then maybe they wind up on welfare, while their financial "advisor" (more like the advisor's boss) retires on an eight figure nest egg.

[forummm]

Financial advising as a profession really does seem to attract really devious people doesn't it?  Is it possible that they do not realise they are devious?

They are salesmen selling a product that is unquestionably worse than other products on the market. Like car salesmen, it's a certain kind of person that is attracted to and sticks with that kind of job--and can even make a lot of money doing it.

Why does the seller have to be "devious."  Why not blame the greedy but uneducated person that thinks he or she is an "investor" but is really just a dumbass with a little extra cash?

I'm generally against people that deceive other people in order to take their money from them. The larger the amount of money the greater my opposition. I agree that the general public should know more about personal finance. But it's also not realistic to expect everyone to be able to understand this stuff well enough to make good personal investment decisions. There are tens of millions of people who just don't seem to have the capacity to understand financial matters.

[Vagabond76]

So you want to blame someone for being too ignorant to know that they're being exploited? This also isn't typically "a little extra cash," it's retirement savings. The money they're hoping to have when they stop working for one reason or another. Money that won't be there when they stop working. Then maybe they wind up on welfare, while their financial "advisor" (more like the advisor's boss) retires on an eight figure nest egg.

Yes, I am.  If one is "too ignorant" at anything the solution is to educate oneself.

[frugledoc]

So you want to blame someone for being too ignorant to know that they're being exploited? This also isn't typically "a little extra cash," it's retirement savings. The money they're hoping to have when they stop working for one reason or another. Money that won't be there when they stop working. Then maybe they wind up on welfare, while their financial "advisor" (more like the advisor's boss) retires on an eight figure nest egg.

Yes, I am.  If one is "too ignorant" at anything the solution is to educate oneself.

That is the mustachian way but not doable for the vast majority of complainy pants types.

[NoStacheOhio]

So you want to blame someone for being too ignorant to know that they're being exploited? This also isn't typically "a little extra cash," it's retirement savings. The money they're hoping to have when they stop working for one reason or another. Money that won't be there when they stop working. Then maybe they wind up on welfare, while their financial "advisor" (more like the advisor's boss) retires on an eight figure nest egg.

Yes, I am.  If one is "too ignorant" at anything the solution is to educate oneself.

And for the people who don't know what they don't know, and think going to a "financial advisor" is getting an education? Fuck them, right?

[mrpercentage]

He is better off building his own from a list of Dividend Aristocrats and sticking with the higher yielding while diversifying across sectors. Its really not that hard. The Dow has 30 stocks and is diversified enough to benchmark the entire market. Its also much more realistic to shoot for an averaged 4% yield. Yes you can get much more the danger of cut dividends begins to increase exponentially. A 4% yield should keep you with higher quality names.

I am shooting for an average of 5% yield and would have it but was hit hard by Conoco. They knocked me below 4% for a little while but I did not have enough diversification yet. I was still building into it.

You will not get the proper diversification with a 9% yield. You would own a basket of crap with a couple of good names.