OK, folks, I'm setting up a dividend/distribution account for a friend. Here's what I've suggested to him for a format, he's agreed, so I've got to fill in some blanks.
The idea is use 20% leverage, and then invest as follows
50% - 2x eTRACs notes, yield around 15%, for juice.
30% - variety of high yield stuff, 8%-12%, 8-10 positions
20% - normal long term DGI picks, actual companies as opposed to funds/notes, yield 3%-5% with hope for capital appreciation, again 8 - 10 positions
The poor guy is a foreigner, so has to pay 30% withholding on all distributions, so tax free distributions are no good. In fact, they're probably awful for him.
----
These are my current thoughts.
1) 40%-60% UBS Etracs 2x notes - CEFL, LMLP, SMHD, BDCL, these guys all spit out about 15% per year.
2) 20% - 40% - Income Funds and MLPs, a random collection of this type of stock that spits out around 10% or so per year, examples are CVRR (refinery), CPLP (shipping), NMM (shipping), MEMP (oil production), PNNT (conservative BDC), CIM (mixed mortgage REIT). I could use 3-5 more ideas here, preferably MLPs or financial investment funds that pay a high yield, preferably 8% or more per year.
Any suggestions for other MLPs that pay 8% or more, or some type of financial investment funds that delivers 8% or more per year in a segment other than BDCs or mREITs?
How about a fund that invests in Preferred shares? I own a bit of FPF which has done OK for me, and also FFC. Any other suggestions in that space?
3) 10% - 30%, safer dividend growth and regular reit stocks - O/LTC, KMI are the top picks here.
Any other more typical DGI company stocks in this segment with current yields around 4% and a history of DG? Preferably not in energy. I was thinking perhaps BGS, but I'm not sure what their dividend increase history is. For utilities, what are the "premiere" picks, or is there a highly recommended utility fund that is expected to capture the industry better than an individual stock?
----
So I wouldn't mind some suggestions for MLPs or income funds that pay ~8% or more for category 2, and are in non-represented industries.
And for typical DG, other than KMI and O/LTC, what are "core" holdings that don't have similar exposure to the other MLPs listed above? I know utilities are sort of key here, so I should probably get one of those. BGS (consumer foodstuff) seems OK with a 4% yield now and great for diversification, but not sure of their history of increasing the dividend. Any boring industrial companies with yields above 4% would be great.
Thanks for any help! |
