Published Sun, 26 Jan 2014 22:30 CET
It is commonly perceived that the best time to invest is when overall sentiment is negative or the respective security is trading on its historical lows. However, a vigilant investor won’t just rely on historical price lows when it comes to making a buying decision. A mix of technical analysis along with fundamental scrutiny offers more detailed and better analysis before making any investment.
Now, trading in exchange traded funds (ETFs) saves an investor or a trader from long, in-depth analysis and also delivers the most key advantage of diversification. An ETF follows an index or commodity of baskets of assets but is different from mutual funds as it trades like a stock. ETFs not only benefit investors with low expense ratios but also with low trading commission as compared to mutual funds.
Keeping in view the vital trading ingredients of historical price lows, fundamental factors and risk diversification, db X-trackers MSCI Brazil Hedged Equity Fund (NYSE: DBBR) is an ETF worth taking a look at. DBBR is not only trading near its 52-week lows of $14.24 but also represents the dividend yield of 19.75%.
The ETF tracks the performance of MSCI Brazil US Dollar Hedged Index and covers the Brazilian equity markets. It also diminishes the risk of fluctuations between US dollar and Brazilian real values. It is a non-diversified ETF with 80 percent of its net assets in Brazilian equities and in financial instruments which hedge the fund’s exposure to Brazilian real. DBBR has its major holdings in sectors of financial services and consumer defensive with proportions of 26.47% and 23.23% respectively. DBBR highest stock price in the last 12 months was $21.02. A valid argument would be that the high dividend yield is due to the low ETF price, however when the paid dividend is compared to its highest price in last one year, the dividend yield would still be around 14%.
Another notable ETF trading on its one year historical lows is iShares Mortgage Real Estate Capped (NYSE: REM) with dividend yield of 16.10%. The ETF is currently trading near its 52-week low of $11.25. iShares Mortgage RealEstate Capped follows the investment results of an index comprising of real estate investment trusts holding US residential and commercial mortgages. This index tracks the performance of several sectors including residential and commercial mortgage real estate and mortgage finance. More than 90% of REM’s holdings consist of securities and depositary receipts representing the securities of the respective index.
The ETF has total net assets of $947.42 million with major holdings in the real estate sector. REM's highest stock price in the last 12 months was $15.86 and REM has been consistent in dividend payouts. In the last four quarters the ETF paid dividends of $0.433, $0.527, $0.421 and $0.477, respectively. REM also maintains reasonable liquidity for an investor, with an average volume of 1.289 million shares per day.
iShares International Developed Real Estate (NYSE: IFGL) offers the similar potential with net assets of $706.16 million and dividend yield of 11.79%. The ETF measures the investment results of a real estate equities index. The index comprises of real estate equities in developed countries, without the United States.
IFGL follows the investment results of the FTSE, EPRA/NAREIT developed real estate ex-U.S. Index. iShares International Developed Real Estate allocates at least 90 percent of its holdings in securities and in depositary receipts of the securities of the respective index. IFGL also has met investors’ expectations by reporting a total return of 7.23% for 3-years, while its year-to-date return stands at 4.62%. IFGL is currently trading near its lowest stock price of $30.48, while it's twelve-months high is $37.14.
|ETF name||ISIN||Price||TER||YTD||Dividend Freq||Ex Div Date||Dividend Yield|
|iShares Mortgage Real Estate Capped ETF||US4642885390||43.33||USD||0.48||23.14||Quarterly||09/26/2016||10.83|
|iShares FTSE EPRA/NAREIT Dev RE ex-US||US4642884898||27.85||USD||0.48||2.34||Quarterly||09/26/2016||3.11|
|db X-trackers MSCI Brazil Hedged Eq ETF||US2330513092||10.59||USD||0.60||31.69||Semi-Annual||12/09/2016||0.00|