Understanding dividends/distributions from ETFs

Claymore Investments, Inc. 14 May, 2010 | 2:50AM

Earning dividend or interest income can be an important part of an investment strategy. In addition to price returns, dividends and distributions can add to returns during up markets, help cushion returns during down markets, and allow investors to get paid while they wait during sideways markets.

There is a wide variety of choice in ETFs for investors seeking to receive distributions within their investment strategy. Each ETF will have a specific distribution policy and schedule and may pay distributions monthly, quarterly, semi-annually or annually. Many ETFs allow investors to choose to receive distributions as either cash or to have distributions reinvested through a dividend reinvestment plan (DRIP).

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Claymore Investments, Inc.

Claymore Investments, Inc.