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Handy Dandy Information From iShares
By JLP | August 1, 2007
I consider myself a fan of iShares Exchange-Traded Funds. That doesn’t mean that I like every ETF they have to offer but for the most part I think they are a solid company. Anyway, one of the things I like about their ETFs is their distribution schedule (PDF). It’s very simple and easy to understand and makes it very easy to plan your income from your portfolio.
Their fixed income ETFs pay distributions once a month (except for December which usually has two payouts). So, if you are an income investor, you can estimate how much your monthly check will be. It’s important to note the date you want to know is the pay date, which is the date that the money will actually hit your account. This date is usually seven to 14 days after the ex-date.
For instance, in 2006, had you invested $950,000 ($1,000,000 - $50,000 income for the year = $950,000) in an iShares portfolio consisting of:
30% Domestic Equities (invested equally in each of the ten sectors of the Dow Jones Total Market Index)
20% International (invested in the iShares MSCI EAFE Fund (EFA))
50% Bond ETFs (invested equally in the iShares Lehman Aggregate Bond Fund (AGG) and the iShares iBoxx $ Investment Grade Corporate Bond Fund (LQD))
Here’s what the income would have looked like during 2006*:
So, this portfolio had a yield of 3.41% ($32,435 ÷ $950,000 = .034142 or 3.41%). That’s not too bad for a portfolio that also has room for growth (and potential for losses) since 50% of the portfolio is in equities.
*Please note that I used the ex-date rather than the pay date to arrive at these numbers.
Topics: Index Funds, Investing, Retirement Planning |
August 1st, 2007 at 9:58 pm
I used to like IShares too until Vanguard decided to compete in the ETF arena;-)