Two of the highest yielding US-registered ETFs are based on indexes published by S-Network Global Indexes, LLC (S-Network), according to a report by ETFChannel.com.
The current 30-day SEC yield for the Powershares CEF Income Composite Portfolio (Ticker: PCEF), which is based on the S-Network Composite Closed-End Fund Index (TICKER: CEFX), is +8.02%.
The current 30-day SEC yield for the Market Vectors CEF Municipal Income ETF (Ticker: XMPT), which is based on the S-Network Municipal Bond Closed-End Fund Index (Ticker: CEFMX), is +5.66% and is almost entirely exempt from federal taxation. XMPT is the highest yielding tax exempt ETF in the market.
Paul Mazzilli (pictured), exchange-traded fund (ETF) and closed-end fund (CEF) analyst and architect of the indexes: “This is an overlooked corner of the market that offers great yields in an economic environment where even meager yields are harder and harder to find."
The S-Network Family of Closed-End Fund Indexes are net asset value (NAV) weighted indexes based on US-listed and registered closed-end funds from specific high yield sectors. Index weighting preferences are given to funds trading at discounts to their net asset value, meaning investors in the ETFs can buy assets for less than they are worth. The average discount for the index underlying PCEF is currently -4.135%.
Richard Phillips, Senior Index Analyst at S-Network, says: "These ETFs offer the high yields and solid performance of our Closed-End Fund Indexes and they wrap all of the operational details in one simple package."
The indexes provide a broad cross-section of two corners of the USD224 billion US closed-end fund market. The index underlying PCEF contains 125 different closed-end funds and includes some of the most prominent fixed income managers in the country, including PIMCO and Blackrock. The index underlying XMPT contains 82 different municipal bond closed-end funds.