Summary: When looking at high yield ETFs it’s important to understand how the group of stocks in the underlying index is decided. The MSCI Australia Select High Dividend Yield Index has eight steps for weeding out stocks - however, some of these, like excluding the bottom five per cent of stocks with a negative one year performance, could mean missing out on opportunities.
Key take-out: The high yield index reviewed here does pay more income than the ASX200 - though as we’ve discussed previously, this doesn’t automatically mean capital is preserved.
Key beneficiaries: General investors. Category: ETFs.