Doug Fabian’s

SPECIAL REPORT

The Best Dividend Paying ETFs

Doug Fabian Editor, Successful ETF Investing

IMPORTANT NOTE: This special report is for information and educational purposes only, based on current data as of May 2016. Do not buy or sell any investments without doing adequate research on your own.

The Best Dividend Paying ETFs Copyright © 2016, by Doug Fabian. All rights reserved. No quotes or copying permitted without written consent. Published by: Eagle Products, LLC 300 New Jersey Ave., NW #500 Washington, DC 20001 800/211-4766 Email: [email protected] Website: www.Fabian.com

Introduction Dear Investor, Today, many of you are being misled by your broker… and steered away from some of the most powerful, consistent, income-generating investments available anywhere: dividend-paying exchange traded funds (ETFs). And why is this happening? Because your broker can’t make enough money on these investments. That’s why I created this report. So you can get revenge on those feeminded brokers by blowing the lid off Wall Street’s “Cash Cow Con” and by investing in dividend ETFs. Dividend ETFs not only deliver outstanding capital gains AND up to five times the yields of traditional income plays… But they also help you turn the tables on your broker and free yourself from his or her “me-first” investment advice. With that, I give you my latest special investment report: The Best Dividend Paying ETFs. Yours for bigger dividend yields,

Doug Fabian Editor, Successful ETF Investing

The Best Dividend Paying ETFs Market Vectors Mortgage REIT Income ETF (MORT) A mortgage real estate investment trust (REIT) is a company that purchases or creates mortgages and earns from the interest on those investments. Market Vectors Mortgage REIT Income ETF (MORT) is an exchangetraded fund (ETF) offered by Van Eck that seeks to invest in and profit alongside such companies. This fund follows and replicates the performance of an index created by Van Eck for global mortgage REITs, though presently all its holdings are in the United States. The index classifies a company as a mortgage REIT if it gains at least half its revenues from mortgages or mortgage-based products. The companies held in the index are primarily mid- and small-cap stocks.

REITs are required by law to distribute most of their profits to shareholders, so most REITs pay high dividends. This fund is no exception. Its current yield is more than 10%, with distributions occurring quarterly.

MORT holds $96.2 million in assets managed and has an expense ratio of 0.41%. MORT is fully invested in mortgage REIT companies. Some of its prominent holdings are Annaly Capital Management Inc (NLY), Starwood Property Trust Inc (STWD) and Two Harbors Investment Corp (TWO).

YieldShares High Income ETF (YYY) A closed-end fund uses an initial public offering (IPO) to raise capital on, usually, a one-time basis, issuing a fixed number of shares to the public. YieldShares High Income ETF (YYY) is an ETF that allows you to get exposure to that market. YYY follows an index that tracks the broad U.S. closed-end fund market, specifically targeting high dividend payers. This index selects closed-end funds for investment by analyzing them for yield, liquidity and discount to net asset value. This last item is the difference between a fund’s trading price and its actual worth in terms of its securities, a difference that arises because of the limited number of shares in each closed-end fund and high demand. YYY produces a 10.3% dividend yield from its investments. This distribution is paid on a monthly basis, which makes it useful for investors looking for regular income. YYY invests more than half of its assets in bonds. Its net assets total $84.2 million, and it has an expense ratio of 1.00%. YYY’s holdings include GAMCO Global Gold, Natural Resources & Income Trust (GGN), First Trust Intermediate Duration Preferred & Income Fund (FPF) and Morgan Stanley Emerging Markets Domestic Debt Fund (EDD), among others.

Yorkville High Income MLP ETF (YMLP) A limited partnership is a relationship between investors and managers for mutual benefit, in which the partnership does not need to pay taxes on its profits. Instead, the partnership distributes those profits to shareholders, who do have to pay taxes on them. This avoids double taxation. A limited partnership is considered a master limited partnership (MLP) if it invests primarily in real estate, commodities and natural resources. MLPs have the privilege of being as liquid as regular publicly traded companies. Yorkville High Income MLP ETF (YMLP) seeks out MLPs with high distributions for use as an income source. YMLP tracks an index of MLPs oriented towards oil, gas and other commodities. Its net assets managed total $92.6 million. Its expense ratio is 0.85%. Its 25.44% dividend yield is quite high, with dividends paid quarterly in February, May, August and November.

Some of YMLP’s holdings are Transocean Partners (RIGP), an offshore drilling contractor; Sunoco LP (SUN), a fuel distributor; and Calumet Specialty Products Partners LP (CLMT), which produces a wide range of largely oil-based products, including waxes and solvents.

Arrow Dow Jones Global Yield ETF (GYLD) If you’re seriously interested in dividends, you may have interest in a fund that is less narrowly focused than the other four listed here. If you want high yields without committing to a specific investment strategy, one way to accomplish this is using Arrow Dow Jones Global Yield ETF (GYLD). GYLD follows a general index that invests according to several different strategies. The primary goal of the fund is to find high-yielding securities that are also of high quality in a variety of different asset classes. It invests in equities, real estate, “alternative” investments (MLPs, preferred shares and royalty trusts), global corporate debt and global government bonds. Each of these five areas is weighted equally. The ultimate result of this strategy is an 8.7% dividend yield, alongside whatever capital appreciation the underlying securities achieve. This dividend is paid out on a monthly basis.

GYLD has $101 million in assets managed and an expense ratio of 0.75%. Among its specific holdings are Natural Resource Partners LP (NRP); CenturyLink, Inc. (CTL); and Peruvian government debt, among its wide range of diverse investments.

Market Vectors BDC Income ETF (BIZD) A business development company (BDC) is a company that invests in small startups to help grow them beyond their initial phases. One of the primary reasons BDCs can be attractive is because, as publicly traded companies, they provide an indirect means for the average investor to speculate in startup companies, which would otherwise be challenging. Market Vectors BDC Income ETF (BIZD) is one way for investors to get into this market. This ETF tracks an index that replicates the performance of a number of the largest BDCs in the United States, though none of its holdings are actually large-cap stocks.

BIZD has a dividend yield of 9.24%, distributed quarterly. The companies it invests in tend to have good dividends, and those dividends are passed on to the investor. BIZD’s expense ratio is currently 9.45% due to a recent acquisition, but the management fee is only 0.40%. It has around $82 million under management. Current top holdings include Ares Capital Corp. (ARCC); American Capital Ltd. (ACAS); Prospect Capital Corp. (PSEC); and FS Investment Corp. (FSIC).

Doug Fabian is the editor of the free weekly e-letter, Weekly ETF Report, his trading service ETF Trader’s Edge, and his paid financial newsletter Successful ETF Investing.. Both are published by Eagle Financial Publications. He also has a new website, ETF University, or ETFU.com, designed to educate investors about the benefits of exchangetraded funds. Doug has helped his readers successfully navigate bull and bear markets for more than 30 years. His flagship advisory service, Successful ETF Investing, has produced doubledigit percentage annualized returns since 1977. Doug Fabian

Doug often appears on CNBC, CNN and Fox News, and he has been featured in The Wall Street Journal, USA Today, The New York Times, Fortune, Smart Money and Barron’s. Doug became a member of the “SmartMoney 30″ in 1999 — a listing of the most influential individuals in the mutual fund industry. In the feature, SmartMoney magazine exclaims that Doug is the best-known “trend follower” among the $56 billion (and growing) group of financial advisers. In 2001, Doug wrote “Maverick Investing,” published by McGraw-Hill. Doug has become known for his expert knowledge and timely use of innovative tools such as exchange-traded funds, bear funds and enhanced index funds to profit in any market climate.

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