Where Best to Compare ETFs

Two Websites ace the data you need to compare exchange-traded funds: XTF and ETFdb have the sharpest tools in the drawer—including illustrated tools that let you search by geographic reach. Barron's by Mike Hogan

As easy as they are to trade, and as cheap as they are to own, it's often hard to see an exchange-traded fund for its metrics.

Think about how hard it is to penetrate any single security's forest of data, times 25 to 700 fund holdings. Then multiple that by three or more funds that qualify as comparable investments.

Whenever I have to build an ETF short list, the two sites I invariably turn to are XTF (xtf.com) and ETF Database, or ETFdb (http://etfdb.com).

They slice and dice the 1,400-ETF universe in numerous different ways—but, between them, I can always find the right tool for the job. And both are revamping their fund sifters right now.

XTF has just finished revamping its ETF Comparison and ETF Explorer tools.

The first helps subscribers assemble up to six similar funds to compare by a keyword, security's name or a fund's ticker symbol, while the second lets the user whittle down funds by investment objective. The popularity of these two most-often-used tools has led XTF to integrate some of their features into other parts of the site as well, reports president and CEO Mel Herman.

A search on any ETF ticker also fetches links to up to six similar funds. Clicking on the new Compare ETFs button atop the fund-profile pages instantly launches a spreadsheet-like display of all metrics for those funds. The user can easily add or remove funds to the list.

For example, a search on the very popular iShares MSCI Emerging Markets Index (ticker: EEM) brings up five like tickers. But some, such as the Rydex MSCI Emerging Markets Equal Weight ETF (EWEM), garner a low overall investibility score—based on XTF'S many-factored ranking algorithm—compared to XTF's 8.3 rating for EEM, on a scale of 10.

Both XTF and ETFdb have tools that let the user quickly find ETFs by exposure to a particular security. Both have exhaustive Boolean screeners, but they're executed differently. ETFdb's is subtractive, narrowing down the 1,400-strong ETF universe as the user clicks parameters for the 17 most common fund descriptors.

The data are organized under several topic-appropriate tabs; again, ETF data being so voluminous no single page can hold it all.

Like XTF, ETFdb also breaks down major fund characteristics graphically for quicker comprehension; and, later this month, it will start assigning A-to-F letter grades. Users will be able to see how a fund stacks up against its peers in fund expenses, performance, liquidity, volatility, dividends and concentration risk.

The power of XTF and ETFdb ultimately depends on their laborious updates of vast pools of information. Just as important are the clever ways both Websites let you grab onto just the piece of the ETF universe you want—and save yourself from drowning in a sea of incoherent data.

10 Cheap Stocks

10 Cheap Stocks With Dependable Earnings. Bargain hunters should focus on companies that can deliver on forecasts. The evidence favors these names. SmartMoney by Jack Hough

So here are two ways to tell which firms are reliable. The first is to look for a recent dividend increase. That puts more cash in shareholder pockets, but just as important, it signals that managers are confident about future results. After all, no company wants to raise its dividend only to find the new payments unaffordable in the coming year.

The second is another statistical clue: a tight clustering of the earnings estimates issued by different analysts. Three decades of research, including recent studies by Anna Scherbina, now at U. C. Davis, show two important things about estimate dispersion. First, tightly grouped estimates are more likely than scattered ones to precede an upside earnings surprise. Second, stocks with clustered earnings estimates tend to outperform those without.

One theory on why this is so has to do with the earnings guidance that companies provide to analysts. Firms with good news to report tend to be more forthcoming with details than firms that are struggling, the thinking goes.

The 10 stocks below have modest P-E ratios and healthy dividend yields. They've also raised payments over the past year and have earnings estimates that show relatively close agreement among analysts.

COMPANY TICKER
ABBOTT ABT

ALTRIA
GROUP MO

ANALOG
DEVICES ADI

CAMPBELL

SOUP CPB

DARDEN

RESTAURANTS DRI

GENERAL

DYNAMICS GD

JOHNSON &

JOHNSON JNJ

MATTEL MAT

MICROSOFT MSFT

RAYTHEON RTN

2012 Dividend Income Goal

2012 Dividend Income Goal
We finished the year with $6,341 in dividend income versus our 2011 year end goal of $6,700. We sold some dividend stocks in 2011 to help purchase a vacation rental condominium. We plan on growing the yearly dividend income for 2012 to $6,700 by the end of the year from our end of year 2011 balance of $6,341. In 2011, we continued to see many dividend increases as we did in 2010.

I plan to be a little more conservative with my stock purchases for 2012. I will focus on increasing stock purchases into our large blue chips stocks that will represent long term value. I will look to reduce some of my bank holding throughout 2012 as well.

Our long term goal is to have $30,000 in yearly dividend by retirement in 2024. Keep in mind, I don't consider this dividend stock portfolio diversified. I have most of our retirement assets in a diversified mutual fund portfolio with Vanguard.

Review of 2011 and New 2012 Financial Plan

The financial markets of 2011 reached their peak in April and turned down over the summer but ended the year nearly flat. The S&P 500 had a total return (including dividends) of 2.11% for the year. Many dividend stocks increased their dividend payments in 2011 as they did in 2010.

A few years ago I started tracking our yearly progress towards reaching our retirement goals of having $2 million in retirement assets as well as reaching $30,000 in dividend stock income. I originally wanted to complete both these goals by the time I am 60 which is 13 years from now. But with the market decline in 2008, we will have to add a couple of years to our goal and our new plan is to retire at age 62 which is in 15 years. I have been using Bloomberg's Retirement Planner on their personal finance calculators site to come up with what we will need at retirement.

2011 Retirement Goal
$615,699 2010 year end retirement asset balance
$52,334 8.5% investment return
$9,500 2010 contributions to our retirement accounts
$677,533 2011 year end goal

Retirement Assets
In order to reach our retirement goal, we will need an average investment return of 8.5% along with a 10% contribution to our retirement plans for the next 15 years. I have used $95,000 for our annual household income that we will need in retirement. I am using 3% for inflation, 2% for expected salary increases and 8% return on investment during retirement.

We finished 2011 with retirement assets of $624,115 versus our end of year goal of $677,533. So we were $53,418792 under goal for the end of 2011.

To calculate the amount needed for the end of 2012, I start with our 2011 year end retirement balance of $624,115 which is the balance of our retirement accounts as well as our taxable stock accounts. We then add the 8.5% investment return which is $53,049 for a total of $677,164. Next I add our retirement contributions of $9,500 which is a 10% contribution for a grand total of $686,664 in retirement assets needed at the end of 2011.

2012 Retirement Goal
$624,115 2011 year end retirement asset balance
$53,049 8.5% investment return
$9,500 2010 contributions to our retirement accounts
$686,664 2012 year end retirement goal

As part of our retirement contributions, we will make contributions to our Roth IRA's as well make 6% contributions to our 401(k) and 403(b) plan.

2011 Net Worth Goal
$677,533 2011 year end retirement goal
$205,000 House
$30,000 Cash
$6,000 Cars
$3,000 Personal Property
$38,000 529 Accounts
$959,533 Total

Net Worth
We finished 2011 with an actual net worth of $938,892 versus our 2011 Net Worth goal of $959,533 which is $20,641 under the 2011 goal.

2012 Net Worth Goal

Assets
$686,664 2012 year end retirement goal
$205,000 House

$140,000 Condo
$30,000 Cash
$16,700 Cars
$3,000 Personal Property
$45,000 529 Accounts

Debt

$5,811 Car Loan

$107,942 Condo Mortgage

$1,012,611 Total

Let's hope the 2012 plan goes better than in 2011. I will go over my 2012 Dividend Income Goal on Monday.

Top 20 Stock Holdings

Here are the top 20 stocks in my Dividend Portfolio as of 12/31/11 ranked by size of holdings.

1. Kinder Morgan Energy (KMP) USA
2. DCP Midstream Partners (DPM) USA
3. ONEOK, Inc. (OKE) USA
4. Abbott Labs (ABT) USA
5. Johnson & Johnson (JNJ) USA
6. Procter & Gamble (PG) USA
7. PepsiCo (PEP) USA
8. General Electric Company (GE) USA
9. Exxon Mobil (XOM) USA
10. GlaxoSmithKline (GSK) UK
11. Unilever NV (UN) Netherlands
12. Aircastle Limited (AYR) USA
13. Becton, Dickinson and Co (BDX) USA
14. Barclays PLC (BCS) UK
15. Pfizer (PFE) USA
16. Intel (INTC) USA
17. Newell Rubbermaid (NWL) USA
18. CommonWealth REIT (CWH) USA
19. Duke Energy (DUK) USA
20. Novartis (NVS) Switerland


Here are the top 10 holdings of the Vanguard High Dividend Yield ETF (VYM) as of 11/ 30/11. The Fund consists of stocks that are characterized by higher-than-average dividend yields, and is based on the U.S. component of the FTSE Global Equity Index Series (GEIS). Real estate investment trusts (REITs), whose income generally do not qualify for favorable tax treatment as qualified dividend income (QDI) are removed, as are stocks that have not paid a dividend during the previous 12 months.

1. Exxon Mobil Corporation (XOM) USA
2. Microsoft (MSFT) USA
3. Chevron (CVX) USA
4. Johnson & Johnson (JNJ) USA
5. Procter & Gamble (PG) USA
6. AT&T (T) USA
7. General Electric Company (GE) USA
8. Pfizer (PFE) USA
9. Coca-Cola (KO) USA
10. Walmart (WMT) USA

December Dividend Income Update

I have been building a stock portfolio of dividend stocks outside of my retirement accounts that I will use to help produce income in retirement. This portfolio was valued at $143,152 as of the end of December.

My Annualized Dividend Income as of the end of December increased to $6,341 from $6,317 over the past month. This means my dividend stocks will pay $6,341 in dividends over the next 12 months. This portfolio of stocks has a current yield of 4.42%.

All my dividend distributions from the month went toward paying down debt. The stock market was up for the month and we continue to see companies increasing their dividends this year.

Most of my stocks are held in my Vanguard Brokerage account and the rest are DRIPs. I am keeping track of the amount of income I could receive once I retire or choose to receive the dividends in cash.

I will post my Top 20 Stock Holdings on Thursday.

December Net Worth

As of the end of December our Net Worth increased to $938,892 from $928,483 for the month which is a 1.12% increase. The increase in net worth is tied to the increase for the stock market in December. The S&P 500 was up 1.02% for the month of December.

The breakout is as follows:
ASSETS
Retirement Accounts $480,963
Taxable Accounts $143,152
Cash $28,114
Home $205,000
Other Real Estate $140,000
Cars $18,700
Personal Property $3,000
Kids 529 Accounts $42,116

DEBT

Other Mortgage $110,942

Car Loan $10,811

Credit Card $400

NET WORTH

$938,892

Here is the summary for this month:

The stock market was up for the month of December. The S&P 500 was up 1.02% for the month and that accounted for most of our increase in value.

We now have $400 in credit card debt that is interest free for 12 months. The money was used to furnish our new investment condo. We will continue to use our other credit cards for rewards but pay off the balances each month. All dividends received this month went toward paying down debt.

We also have a car loan for $10,811 since we purchased a new car in October.

We will be paying down debt and trying to building up our cash over the next few months to increase our cash reserves. You can click on my Net Worth graph on the right to see the changes in each category from the previous month. We continue to fund our Roth IRA's each month.

I will post my Dividend Income Update on Wednesday.