A lot of Maltese investors want to earn interest on their investment. It is not an option for many Maltese to opt for an asset class which does not pay out some form of income. I’m assuming that the majority of these investors would not need the capital imminently though would like to substantiate their salary with other forms of income in order to increase their standard of living.
The problem is that nowadays, fixed income does not continue to satisfy investors’ needs. If you look at the 10-year German bund yielding close to 0.50% or a ‘B’ rating European High Yield name giving you (on average) a yield of 4.00%, investors no longer feel adequately compensated for the risk they are taking.
However there are other asset classes investors could consider to continue receiving income from their investment. One of these is the equity market.
For those investors who are not used to investing in equities or consider this asset class as being too risky for their tastes, I suggest looking at exchange traded fund:
iShares EURO STOXX Select Dividend 30 (SD3EEX GY – trading on a dividend yield of 4.80%)
iShares EURO STOXX Select Dividend 30 UCITS ETF (DE) is an open-end, UCITS compliant exchange traded fund incorporated in Germany. The fund aims to track the performance of the EURO STOXX Select Dividend 30 index. The fund distributes income received to shareholders.
For those investors who want look at individual equities rather than diversified composite, the following are the five holdings in this ETF which we like for the long term:
Societe Generale SA (ticker: GLE, indicative gross yield 5.15%)
Societe Generale SA attracts deposits and offers commercial, retail, investment, and private banking services. The Bank offers consumer credit, vehicle lease financing, information technology equipment leasing, life and non-life insurance, custodian services, trade and project financing, currency exchange, treasury services, and financial and commodities futures brokerage services.
Deutsche Post AG (ticker: DPW, indicative gross yield 2.76%)
Deutsche Post AG provides mail delivery and other services to the public and businesses. The Company offers domestic mail delivery, international parcel and mail delivery services, and freight delivery and logistics services.
BASF SE (ticker: BAS, indicative gross yield 3.31%)
BASF SE is a chemical company. The Company operates in six segments chemicals, plastics, performance products, functional solutions, agricultural solutions and oil & gas. BASF offers products for the chemical, automotive, construction, agriculture, oil, plastics, electrical / electronics, furniture and paper industries, and provides a range of system solutions and services.
Total SA (ticker: FP, indicative gross yield 5.22%)
TOTAL S.A. explores for, produces, refines, transports, and markets oil and natural gas. The Company also operates a chemical division which produces polypropylene, polyethylene, polystyrene, rubber,
paint, ink, adhesives, and resins. TOTAL operates gasoline filling stations in Europe, the United States, and Africa.
Allianz SE (ticker: ALV, indicative gross yield 4.70%)
Allianz SE, through subsidiaries, offers insurance and financial services. The Company offers property and casualty, life and health, credit, motor vehicle and travel insurance, and fund management services.
This article was issued by Kristian Camenzuli, Investment Manager at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice.