2022-02 Dividend Income Report

SDY Four-quarter Moving Average

Here is the dividend income report for February, 2022.

The monthly dividend income came out to $224.92. The yearly income total for 2022 through the end of the month was $298.20.

The income for February 2021 was $182.83, and the yearly income for 2021 through the end of February was $271.23.

Over the past few months I have mentioned that I am thinking about buying some shares in individual stocks again. I had to move hosts and go through some posts to update the image links, and I re-read some posts about individual stocks vs ETFs. The reasons I went to ETFs was that it was less work to keep track of in general, companies can make things more complex by doing mergers or spin-offs, and they will sometimes try to buy out shareholders with less than 100 shares at less-than-market prices. The advantages of individual stocks was that generally the income increased every quarter, while for ETFs (even ETFs based on DGI indexes) the income is variable.

I downloaded the dividend history for SPDR S&P Dividend ETF (SDY) from December of 2005 to 2020, and plotted the four-quarter moving average. It started at $0.30 in 2005, peaked at $0.50 in 2009, went down to $0.40 in 2010, and had some ups and downs until getting to about $0.83 in 2021. Not as much of a straight line as it is for, say, VZ, but still growth.

BND Four-quarter Moving Average

I also did the same for Vanguard Total Bond Market ETF (BND) for as long as I have had it (State Street gives the full distribution history for its funds; as far as I can tell, the supposedly investor-friendly Vanguard only gives about a year and a half). It went up from about $0.15 to about $0.20, and then gradually down to $0.14 again. I have more shares, but I am getting less income.

I am also considering another covered call exchange-traded product. I may not actually get any of these for a while since this involves a LOT of reading.

For some background: I just listened to an episode of the Index Investing Show from 2020 where he talked about why holding GLD (SPDR Gold Shares) is better than buying bullion. You do not have to deal with storage, insurance or commission fees. He also mentioned you can generate income by selling covered calls on GLD.

One issue w/covered call strategy outside of ETFs/ETNs and using the product yourself is that your shares can get called away. Ron DeLegge said this has happened with his ETF Guide Premium Covered Call portfolio strategy. I guess that’s a fact of life, and it is not the end of the world. But then in order to continue, you have to go out and buy more shares in the underlying securities (presumable at a higher price than when you originally bought them). I think using ETFs that execute covered call strategies removes this potential burden.

I am looking at an ETF (exchange traded fund) and an ETN (exchange traded note) that sell covered calls on GLD.

An interesting fact about GLD: as far as I know, it is the only ETF with its own website. It also has a page on the State Street Site.

The ETF is the FT Cboe Vest Gold Strategy Target Income ETF (IGLD), offered by a company called First Trust. According to the summary prospectus, a lot of the work is done by a sub-advisor called Cboe Vest.

The ETN is the X-Links Gold Shares Covered Call ETN (GLDI) by Credit Suisse. It follows the Gold FLOWS 103 Index, which I think Credit Suisse made up. If the company running the fund also made the index, is the ETN really passive?

I have to read more through all the docs, but I think the general state is: GLD holds gold bullion in vaults, GLDI holds GLD and sells covered calls with a strike price 3% above the then-current price, and IGLD holds treasury bonds and sells different types of options on GLD without holding GLD itself.

GLDI is an ETN, and I need to look into how ETNs are different than ETFs (start with articles here and here). I think the basic differences are that ETNs have better tax treatment, and they are notes and depend more on the solvency and financial health of the issuer, which ETFs are all legally separate vehicles; in other words, there are different ways you can lose money. I don’t think Credit Suisse is going bust anytime soon. I have never heard of First Trust until now. Since I will do this in an IRA account, I don’t think that the tax differences will matter.

I will have to read the documents for the ETFs and the ETN before making a decision. I should probably go through GLD first, then IGLD, then GLDI. The methodology for the Credit Suisse Nasdaq Gold FLOWS 103 Index is 22 pages. The prosectus for GLD is 36 pages, which up until I had opened it was the longest prospectus I had seen for a single fund (some fund families will have prospectuses for multiple funds in one document). The prospectus for GLDI is 189 pages. That is longer than some annual reports. Usually they are a lot of verbiage explaining that you are on your own and listing all the theoretically possible ways your money could go up in smoke. But this is by far the longest one I have seen.

I also plan on going through a list of commodity ETFs from ETF.com. Perhaps one of them pays a consistent dividend, and I can be closer to the ideal put forth by Ron DeLegge. He has said a lot of people are missing commodities. I do not want to invest in anything without a decent cash flow, and most commodity ETFs have no cash flow. There are a few that do covered call strategies, but not for too many commodities. There are a couple for GLD, and Credit Suisse has one for silver and one for crude oil. The price on the oil ETN took a dive, as did the distribution (which are called “coupons” for ETNs): from $3.68 in 2019 to $1.06 in 2021. I have not been able to find any covered call ETFs for anything agricultural or the overall commodity sector.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each February from 2012 through 2022:

Month YTD Amount 3MMA 12MMA
2022-02 $298.20 $224.92 $1235.58 $914.87
2021-02 $271.23 $182.83 $1253.94 $883.71
2020-02 $208.18 $196.17 $1259.50 $871.11
2019-02 $229.17 $138.45 $847.72 $589.58
2018-02 $126.02 $66.43 $654.60 $581.51
2017-02 $684.93 $466.05 $570.90 $511.78
2016-02 $620.16 $383.08 $524.89 $460.41
2015-02 $567.34 $353.85 $492.40 $375.72
2014-02 $496.28 $336.61 $363.62 $295.33
2013-02 $358.51 $248.39 $348.20 $287.16
2012-02 $497.58 $308.90 $337.51 $264.48


Here are the securities and the income amounts for February, 2022:

  • Global X S&P 500 Covered Call ETF: $53.26
  • Vanguard Total Bond Market ETF: $137.97
  • Vanguard Total International Bond ETF: $10.62
  • Gladstone Land: $23.07

Big Jim likes investments that do the work for him.

Some terms in this post are trademarks of Credit Suisse, First Trust, State Street Global Adivisors, and possibly other entities.

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Page created on 2022-03-02_9:19:42, last modified on 2022-03-13_22:00:34.

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