Filtering Sharescope for High Income ETF’s

Filtering for High Income

Finally another popular question is selecting high income funds and we can use ETFs as an example. I would typically apply my other usual criteria on cost, currency and size but there are some other things to think about in this case. If we filter based on minimum 12 month yield the problem is this selects funds where the price has crashed recently. Dividend yield is income divided by price so a suddenly much smaller price can result in huge yields. This means looking at recent return for the fund over the last 3 months, say, can be helpful. By choosing funds where the 3 month return is above a threshold you can omit these funds. I find volatility helpful here too because a fund that generates more yield (income) for the same amount of risk (volatility) is preferable. In ShareScope this is “Deviation of Returns” and I usually choose a period covering the last year measured with a daily sample frequency. If you filter by latest Close date being recent (last week or so) you can also ensure that this is not a fund that is not priced regularly and that the fund hasn’t been closed down.