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High yield ETF's are an effective way to gain exposure to sector or asset class movements that provide dividend income and the opportunity for capital growth. In recent years, exchange traded funds have increased in popularity due to the fact that ETF's are composed of a basket of stocks. This isolates an investor from exposure to any one particular stock. High yield exchange traded funds can be selected according to ones investment preferences. The following article discusses some product options for investing in dividend ETF's. The Wisdom Tree Company provides a range of high dividend yield
ETF products that cover domestic dividend, international dividend
indexes and sector dividend indexes. The essence of these products
are to weight the indexes according to dividend yield. Under conventional
market weightings, indexes are weighted according to market capitalization.
The Wisdom tree company studied market weightings and concluded
that markets tend to become overweighted in overvalued stocks and
underweighted in undervalued stocks. High yield ETF's provide flexibility for asset class exposure.
Market participants that have a preference for a particular sector
of the economy can buy an exchange traded fund that has a concentration
of holdings in that sector. They can also choose a fund comprises
large capitalized stock or small capitalized stocks. For example,
an investor that wants exposure to the financial sector could purchase
the Wisdom Tree Financial Sector index which is heavily weighted
in banks and insurance stocks. Other products include the TOP 100
US dividend paying stocks and the TOP 100 International dividend
paying stocks. Investors that want exposure to high yield ETF's from a foreign
country can invest in high dividend yield ETF products that cover
Japan or Europe. The Pacific ex-Japan Dividend Index covers Hong
Kong, Singapore, Australia and New Zealand with exposure to companies
such as China Mobile, Hang Seng Bank, Telstra Corporation, Westpac
Corporation and BHP Billiton. High yield ETF products can be used as a short term trading vehicle
or as part of a longer term sector rotation or region based strategy.
These products offer regular dividend streams and the chance to
capture capital growth. They are products worthy of consideration
for every investor and trader. Next article: international ETFs 
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