@CloudExpo Authors: Elizabeth White, XebiaLabs Blog, Roger Strukhoff, Pat Romanski, Carmen Gonzalez

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.

@CloudExpo Stories
In the next five to ten years, millions, if not billions of things will become smarter. This smartness goes beyond connected things in our homes like the fridge, thermostat and fancy lighting, and into heavily regulated industries including aerospace, pharmaceutical/medical devices and energy. “Smartness” will embed itself within individual products that are part of our daily lives. We will engage with smart products - learning from them, informing them, and communicating with them. Smart produc...
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
Extreme Computing is the ability to leverage highly performant infrastructure and software to accelerate Big Data, machine learning, HPC, and Enterprise applications. High IOPS Storage, low-latency networks, in-memory databases, GPUs and other parallel accelerators are being used to achieve faster results and help businesses make better decisions. In his session at 18th Cloud Expo, Michael O'Neill, Strategic Business Development at NVIDIA, focused on some of the unique ways extreme computing is...
SYS-CON Events announced today that Coalfire will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Coalfire is the trusted leader in cybersecurity risk management and compliance services. Coalfire integrates advisory and technical assessments and recommendations to the corporate directors, executives, boards, and IT organizations for global brands and organizations in the technology, cloud, health...
In his session at 19th Cloud Expo, Claude Remillard, Principal Program Manager in Developer Division at Microsoft, will contrast how his team used config as code and immutable patterns for continuous delivery of microservices and apps to the cloud. He will show the immutable patterns helps developers do away with most of the complexity of config as code-enabling scenarios such as rollback, zero downtime upgrades with far greater simplicity. He will also have live demos of building immutable pipe...
SYS-CON Events announced today that Transparent Cloud Computing (T-Cloud) Consortium will exhibit at the 19th International Cloud Expo®, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The Transparent Cloud Computing Consortium (T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data proces...
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
We're entering the post-smartphone era, where wearable gadgets from watches and fitness bands to glasses and health aids will power the next technological revolution. With mass adoption of wearable devices comes a new data ecosystem that must be protected. Wearables open new pathways that facilitate the tracking, sharing and storing of consumers’ personal health, location and daily activity data. Consumers have some idea of the data these devices capture, but most don’t realize how revealing and...
So you think you are a DevOps warrior, huh? Put your money (not really, it’s free) where your metrics are and prove it by taking The Ultimate DevOps Geek Quiz Challenge, sponsored by DevOps Summit. Battle through the set of tough questions created by industry thought leaders to earn your bragging rights and win some cool prizes.
A completely new computing platform is on the horizon. They’re called Microservers by some, ARM Servers by others, and sometimes even ARM-based Servers. No matter what you call them, Microservers will have a huge impact on the data center and on server computing in general. Although few people are familiar with Microservers today, their impact will be felt very soon. This is a new category of computing platform that is available today and is predicted to have triple-digit growth rates for some ...
Governments around the world are adopting Safe Harbor privacy provisions to protect customer data from leaving sovereign territories. Increasingly, global companies are required to create new instances of their server clusters in multiple countries to keep abreast of these new Safe Harbor laws. Is it worth it? In his session at 19th Cloud Expo, Adam Rogers, Managing Director of Anexia, Inc., will discuss how to keep your data legal and still stay in business.
In past @ThingsExpo presentations, Joseph di Paolantonio has explored how various Internet of Things (IoT) and data management and analytics (DMA) solution spaces will come together as sensor analytics ecosystems. This year, in his session at @ThingsExpo, Joseph di Paolantonio from DataArchon, will be adding the numerous Transportation areas, from autonomous vehicles to “Uber for containers.” While IoT data in any one area of Transportation will have a huge impact in that area, combining sensor...
SYS-CON Events announced today that SoftNet Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. SoftNet Solutions specializes in Enterprise Solutions for Hadoop and Big Data. It offers customers the most open, robust, and value-conscious portfolio of solutions, services, and tools for the shortest route to success with Big Data. The unique differentiator is the ability to architect and ...
SYS-CON Events announced today that MathFreeOn will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. MathFreeOn is Software as a Service (SaaS) used in Engineering and Math education. Write scripts and solve math problems online. MathFreeOn provides online courses for beginners or amateurs who have difficulties in writing scripts. In accordance with various mathematical topics, there are more tha...
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.
Successful transition from traditional IT to cloud computing requires three key ingredients: an IT architecture that allows companies to extend their internal best practices to the cloud, a cost point that allows economies of scale, and automated processes that manage risk exposure and maintain regulatory compliance with industry regulations (FFIEC, PCI-DSS, HIPAA, FISMA). The unique combination of VMware, the IBM Cloud, and Cloud Raxak, a 2016 Gartner Cool Vendor in IT Automation, provides a co...
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smar...
@ThingsExpo has been named the Top 5 Most Influential Internet of Things Brand by Onalytica in the ‘The Internet of Things Landscape 2015: Top 100 Individuals and Brands.' Onalytica analyzed Twitter conversations around the #IoT debate to uncover the most influential brands and individuals driving the conversation. Onalytica captured data from 56,224 users. The PageRank based methodology they use to extract influencers on a particular topic (tweets mentioning #InternetofThings or #IoT in this ...