Dividend yielding ETFs?

[crew]

Sorry if this post was made before but the search field won't let me search for "dividend etf".

Can you guys recommend any high-dividend ETFs? IT can be local or US/International as long as it can be purchased via Japanese brokers (SBI ideally) Dividend stocks suggestions are welcome as well! Thanks!

[Bitey]

I was wondering the same thing recently and, being a "get the simplest thing possible that fits the bill" type of person, decided on Vanguard's VYM (http://www.morningstar.co.uk/uk/etf/sna ... 0P0000M7NP). Haven't bought any yet but it's on my list.

[TokyoWart]

I have had to avoid mutual funds within Japan (US investor) and so used a broad portfolio of Japanese stocks. The high dividend payers have been the trading companies (8001, 8002, 8031, 8053, 8058) which also usually have very low P/E's, telecom (9432, 9433, 9437) and to some extent the auto manufacturers (7201, 7203, 7267, etc.).

[crew]

I was wondering the same thing recently and, being a "get the simplest thing possible that fits the bill" type of person, decided on Vanguard's VYM (http://www.morningstar.co.uk/uk/etf/sna ... 0P0000M7NP). Haven't bought any yet but it's on my list.

Thanks. You purchased this from a Japan side trading account?

[crew]

I have had to avoid mutual funds within Japan (US investor) and so used a broad portfolio of Japanese stocks. The high dividend payers have been the trading companies (8001, 8002, 8031, 8053, 8058) which also usually have very low P/E's, telecom (9432, 9433, 9437) and to some extent the auto manufacturers (7201, 7203, 7267, etc.).

This is awesome thanks. Will look into it if I don't find ETF alternatives. May I ask how being a Us investor prevents you from the Japanese mutual funds? Tax issue?

[TokyoWart]

Mutual funds which are based in a foreign country will usually be classified as Passive Foreign Investment Companies (PFIC). There is a special, very complicated, reporting form that a US taxpayer has to file when they own a PFIC and --as I understand it-- they are effectively taxed on gains in the fund at earned income rates even before those gains are distributed or realized. The result is it's both very difficult to comply with reporting requirements and results in higher taxes. Note this doesn't apply if a US investor buys a Vanguard or Fidelity fund which only holds foreign stocks because Vanguard and Fidelity are US investment firms and report capital gains and dividends to the IRS each year.