KBWY ETF

For investors hungry for a nice raise in their passive income, the higher-yielding dividend exchange-traded funds (ETFs) may be worth a closer look.

KBWY: Small And Mid-Cap REIT Yield Makes Sense Now

Designed to provide broad exposure to the Real Estate ETFs category of the market, the Invesco KBW Premium Yield Equity REIT ETF (KBWY) is a smart beta exchange traded fund launched on 12/02/2010.

The ProShares S&P 500 Dividend Aristocrats® ETF owns stocks that have raised dividends for at least 25 straight years. The SPDR Portfolio S&P 500 High Dividend ETF owns high-yielding equities.

The Invesco KBW Premium Yield Equity REIT ETF (KBWY) was launched on 12/02/2010, and is a smart beta exchange traded fund designed to offer broad exposure to the Real Estate ETFs category of the market.

Invesco KBW Premium Yield Equity REIT ETF (KBWY) is a strong sell due to unsustainable high dividend payout ratios and poor growth characteristics for its REIT holdings. While KBWY offers a high 8.87% yield, its methodology for selecting REITs based on the highest dividend yield has led to low-quality holdings and reduced REIT-type diversification. REITs historically experienced strong performance at the end of Federal Reserve tightening, which may be on the horizon as interest rates are reduced.

Invesco KBW Premium Yield Equity REIT ETF holds a portfolio of 30 equity REITs focused on higher yields. The 8% yield looks very attractive for income-oriented investors. Nonetheless, it has several shortcomings: high volatility, capital decay, distribution decay after 2016, and a bad rating of the largest holding.

Designed to provide broad exposure to the Real Estate ETFs category of the market, the Invesco KBW Premium Yield Equity REIT ETF (KBWY) is a smart beta exchange traded fund launched on 12/02/2010.

KBWY is a high-yield REIT index ETF. It offers investors a strong 8.6% yield, and could outperform as interest rates go down. It is also an incredibly risky, volatile investment.