Monday, November 23, 2009

Dividend capture in December

 Most ETFs with monthly payouts (e.g., AGG, IEF) go ex-dividend 1-Dec (week from Tuesday), so I will be looking at some dividend capture plays for them.    Last month's IEF dividend capture took over 3 weeks to play out, and some days I was a point or more in the red. Even though the position ended up at the maximum profit I'd rather not repeat that level of exposure--I do expect interest rates to start going up pretty soon.

AGG  recent price 105    last dividend  .32
IEF    recent price  92     last dividend . 26

I will also be looking at a JNK dividend capture with an inverse SPY (SH or SDS) as a hedge.  I've noticed that JNK is surprising well correlated with the S&P 500 index.

JNK  recent price 38  last dividend  .38

In addition I'll investigate buying DVY in late December (ex-dividend 23-Dec) with an inverse DOW as a hedge.  It had a $0.39/shr payout last September (it closed Friday at 42.67) - and effective annual yield of  ~3.8%

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