Direxion Zacks MLP High Income Shares
Dividend yield: 7% (estimated)
ETF sponsor Direxion is best known for its suite of leveraged and inverse funds that allow traders to short or “juice” their performance. However, the firm has begun moving into the smart beta and alternative ETF space with a fury of new launches. Its latest is the new Direxion Zacks MLP High Income Shares (ZMLP).
The fund tracks a new index by investment ratings and information service. Zacks uses a quantitative rules-based methodology to sort MLPs by their value, liquidity, short interest, dividend yield and other factors to produce the portfolio. ZMLP is then weighted equally.
The new fund currently tracks 25 different MLPs — again from across the entire spectrum. Currently, 44% of the ETF is in midstream and pipeline firms.
Zacks has had a lot of success in the ETF space, particularly with high yields. The Guggenheim Multi-Asset Income ETF (CVY) — which tracks a Zacks high yield index — is one of the most popular dividend funds around. ZMLP shouldn’t be much different. Especially when you consider the new fund’s dividend yield is estimated to be a sizable 7%.