Containers Expo Blog Authors: Pat Romanski, Yeshim Deniz, Liz McMillan, Flint Brenton, Elizabeth White

News Feed Item

Zacks Investment Ideas feature highlights: an ETN from JP Morgan, Natural gas, Infrastructure, High Income andVanguard REIT Index ETF

CHICAGO, Dec. 7, 2012 /PRNewswire/ -- Today, Zacks Investment Ideas feature highlights Features: an ETN from JP Morgan (AMEX:AMJ), Natural gas (AMEX:MLPG), Infrastructure (AMEX:MLPI), High Income (AMEX:MLPY) and Vanguard REIT Index ETF (AMEX:VNQ).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

No Dividend Tax Debate for These High-Yield ETFs

 No matter what side of the fiscal cliff debate you are on, it seems pretty clear that taxes are going up. Both sides are now proposing new increases with some forecasting that over $1 trillion in new revenues will be collected over the next decade.

A big part of this increase could very well be in the form of new dividend taxes. By some estimates, this favorable rate—which is currently at 15%-- could nearly triple if we go over the Fiscal Cliff, pushing these rates (possibly) up to just south of 45%.

This situation has certainly impacted investors that have a dividend focus, pushing down firms that are in traditional high yield sectors. Key dividend stocks in sectors like utilities have been getting crushed, and other firms with big payouts haven't exactly been doing much better with this cloud of uncertainty (also read 3 ETFs to Prepare for the Fiscal Cliff).

Yet even with this issue, high payout stocks remain in great demand among a variety of investors, thanks to the low rate environment and the lack of quality alternatives in the bond world. So what is an investor to do if they want to still capture high yields but are looking to avoid the risks that come with a massive dividend tax increase?

Focus on Ordinary Income

While most securities pay out investors in the form of qualified dividends, there are a few that utilize a different structure in order to have their yields be categorized as 'ordinary income'. Generally speaking, this is done to avoid double taxation, but it also results in huge payouts, as usually more than 90% of income must be paid out to investors on a yearly basis.

Although it is true that the current rate on ordinary income—for the top bracket—is also expected to rise, it could still stay below the 40% mark. This means that if dividend rates go up to their highest projected level, income derived from ordinary income focused securities could actually be a better deal from a tax perspective while having less policy risk before any decision is made as well (read Escape the Cliff with These Dividend ETFs).

If that wasn't enough, these securities usually pay out more to investors anyway so they could truly become a top yield destination if the worst happens with the Cliff. While individual stocks could certainty be a way to approach this problem, an ETF technique could offer added benefits thanks to the structure and diversification of these products.

So for investors looking for a different high yielding play that could be relatively unscathed by the current dividend issue, a look to any of the following three ETFs may be the way to go:


Master Limited Partnerships are often viewed as the 'toll roads' of the commodity world. They are usually pipelines or similar types of assets that store or move products like oil or natural gas, making them less sensitive to economic conditions while also having very stable businesses.

As you might be able to guess, these are partnerships so investors do have to fill out a K-1 form at tax time. However, if investors buy up ETNs in this space—which are structured as debt that seeks to track an index—this tax headache is avoided while still allowing for all of the taxation benefits (and high yields) that come from investing in the MLP world.

One of the most popular, and oldest, in this respect, is (AMEX:AMJ), an ETN from JP Morgan. It tracks the Alerian MLP Index, charging investors 85 basis points a year in fees while 50 securities are in the underlying index (see How to Play the MLP ETF Space).

Yields come in above 5% for this ETN, while average volume is approaching one million shares a day. If that wasn't enough, investors also have a host of other similar ETNs in the space, each of which have a different focus like natural gas (AMEX:MLPG), infrastructure (AMEX:MLPI), or high income (AMEX:MLPY), so there are certainly a variety of options for those who want to take this route.

Real Estate

REITs, or Real Estate Investment Trusts, are arguably the most famous of the group and are best known for their outsized payouts. These securities invest in real estate projects or manage homes and buildings, making them a much more liquid way to buy up real estate.

The space has over a dozen ETFs giving investors plenty of choices and various ways to delve deeper into a particular sector. While there are a number of broad funds in the REIT ETF world, the most popular is easily the Vanguard REIT Index ETF (AMEX:VNQ).

This is an ultra cheap choice—just ten basis points a year in fees-- that sees great volume of over three million shares a day. The yield is also pretty good, coming in at roughly 3.5% in 30 Day SEC terms suggesting that it could also be a decent yield destination (see Is the Panic Over for mREIT ETFs?).

The ETF also does a great job of spreading out assets as it has over 115 companies in total. Still, SPG takes up a decent chunk at over 10% of the total, but beyond that the fund is quite even and even puts 50% of the assets in securities that are mid caps or smaller.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Len Zacks. The company continually processes stock reports issued by 3,000 analysts from 150 brokerage firms.  It monitors more than 200,000 earnings estimates, looking for changes.

Then when changes are discovered, they're applied to help assign more than 4,400 stocks into five Zacks Rank categories:  #1 Strong Buy, #2 Buy, #3 Hold, #4 Sell, and #5 Strong Sell. This proprietary stock picking system; the Zacks Rank, continues to outperform the market by nearly a 3 to 1 margin.  The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter Profit from the Pros.  In short, it's your steady flow of profitable ideas GUARANTEED to be worth your time.  Get your free subscription to Profit from the Pros at:  http://at.zacks.com/?id=7298

Follow us on Twitter:  http://twitter.com/ZacksResearch

Join us on Facebook:  http://www.facebook.com/ZacksInvestmentResearch

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

[email protected]


SOURCE Zacks Investment Research, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
Poor data quality and analytics drive down business value. In fact, Gartner estimated that the average financial impact of poor data quality on organizations is $9.7 million per year. But bad data is much more than a cost center. By eroding trust in information, analytics and the business decisions based on these, it is a serious impediment to digital transformation.
The standardization of container runtimes and images has sparked the creation of an almost overwhelming number of new open source projects that build on and otherwise work with these specifications. Of course, there's Kubernetes, which orchestrates and manages collections of containers. It was one of the first and best-known examples of projects that make containers truly useful for production use. However, more recently, the container ecosystem has truly exploded. A service mesh like Istio addr...
Predicting the future has never been more challenging - not because of the lack of data but because of the flood of ungoverned and risk laden information. Microsoft states that 2.5 exabytes of data are created every day. Expectations and reliance on data are being pushed to the limits, as demands around hybrid options continue to grow.
Business professionals no longer wonder if they'll migrate to the cloud; it's now a matter of when. The cloud environment has proved to be a major force in transitioning to an agile business model that enables quick decisions and fast implementation that solidify customer relationships. And when the cloud is combined with the power of cognitive computing, it drives innovation and transformation that achieves astounding competitive advantage.
As IoT continues to increase momentum, so does the associated risk. Secure Device Lifecycle Management (DLM) is ranked as one of the most important technology areas of IoT. Driving this trend is the realization that secure support for IoT devices provides companies the ability to deliver high-quality, reliable, secure offerings faster, create new revenue streams, and reduce support costs, all while building a competitive advantage in their markets. In this session, we will use customer use cases...
Digital Transformation: Preparing Cloud & IoT Security for the Age of Artificial Intelligence. As automation and artificial intelligence (AI) power solution development and delivery, many businesses need to build backend cloud capabilities. Well-poised organizations, marketing smart devices with AI and BlockChain capabilities prepare to refine compliance and regulatory capabilities in 2018. Volumes of health, financial, technical and privacy data, along with tightening compliance requirements by...
The IoT Will Grow: In what might be the most obvious prediction of the decade, the IoT will continue to expand next year, with more and more devices coming online every single day. What isn’t so obvious about this prediction: where that growth will occur. The retail, healthcare, and industrial/supply chain industries will likely see the greatest growth. Forrester Research has predicted the IoT will become “the backbone” of customer value as it continues to grow. It is no surprise that retail is ...
Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settlement products to hedge funds and investment banks. After, he co-founded a revenue cycle management company where he learned about Bitcoin and eventually Ethereal. Andrew's role at ConsenSys Enterprise is a mul...
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
DevOpsSummit New York 2018, colocated with CloudEXPO | DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City. Digital Transformation (DX) is a major focus with the introduction of DXWorldEXPO within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term. A total of 88% of Fortune 500 companies from a generation ago are now out of bus...
With 10 simultaneous tracks, keynotes, general sessions and targeted breakout classes, @CloudEXPO and DXWorldEXPO are two of the most important technology events of the year. Since its launch over eight years ago, @CloudEXPO and DXWorldEXPO have presented a rock star faculty as well as showcased hundreds of sponsors and exhibitors! In this blog post, we provide 7 tips on how, as part of our world-class faculty, you can deliver one of the most popular sessions at our events. But before reading...
DXWorldEXPO LLC announced today that "Miami Blockchain Event by FinTechEXPO" has announced that its Call for Papers is now open. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to [email protected] Financial enterprises in New York City, London, Singapore, and other world financial capitals are embracing a new generation of smart, automated FinTech that eliminates many cumbersome, slow, and expe...
Cloud Expo | DXWorld Expo have announced the conference tracks for Cloud Expo 2018. Cloud Expo will be held June 5-7, 2018, at the Javits Center in New York City, and November 6-8, 2018, at the Santa Clara Convention Center, Santa Clara, CA. Digital Transformation (DX) is a major focus with the introduction of DX Expo within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive ov...
DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI, Machine Learning and WebRTC to one location.
DXWorldEXPO LLC announced today that ICOHOLDER named "Media Sponsor" of Miami Blockchain Event by FinTechEXPO. ICOHOLDER give you detailed information and help the community to invest in the trusty projects. Miami Blockchain Event by FinTechEXPO has opened its Call for Papers. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to [email protected] Miami Blockchain Event by FinTechEXPO also offers s...
DXWorldEXPO | CloudEXPO are the world's most influential, independent events where Cloud Computing was coined and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals. Sponsors of DXWorldEXPO | CloudEXPO benefit from unmatched branding, profile building and lead generation opportunities.
Dion Hinchcliffe is an internationally recognized digital expert, bestselling book author, frequent keynote speaker, analyst, futurist, and transformation expert based in Washington, DC. He is currently Chief Strategy Officer at the industry-leading digital strategy and online community solutions firm, 7Summits.
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
Digital Transformation and Disruption, Amazon Style - What You Can Learn. Chris Kocher is a co-founder of Grey Heron, a management and strategic marketing consulting firm. He has 25+ years in both strategic and hands-on operating experience helping executives and investors build revenues and shareholder value. He has consulted with over 130 companies on innovating with new business models, product strategies and monetization. Chris has held management positions at HP and Symantec in addition to ...
Cloud-enabled transformation has evolved from cost saving measure to business innovation strategy -- one that combines the cloud with cognitive capabilities to drive market disruption. Learn how you can achieve the insight and agility you need to gain a competitive advantage. Industry-acclaimed CTO and cloud expert, Shankar Kalyana presents. Only the most exceptional IBMers are appointed with the rare distinction of IBM Fellow, the highest technical honor in the company. Shankar has also receive...