IEFA Dividend Type Payments

Although IEFA has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares CORE MSCI EAFE ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 10:40 AM ET):

iShares CORE MSCI EAFE ETF (IEFA)
Bid Ask Last Change Volume P/E Market Cap
58.45 58.46 58.45 -1.24 2.2M - 575B

IEFA Dividend-Like Income Using Covered Calls

With IEFA at 58.45, here's a table showing how big the annual "dividend" (ie. total annual call premium received) would need to be to attain 3%, 5%, and 10% annual yields. Also shown is the equivalent number of cents/day necessary to achieve each yield:

Annual Yield Annual Premium Cents/Day
3% 1.75 0.5
5% 2.92 0.8
10% 5.85 1.6

So now we need to find out of the money covered calls that pay at least the prescribed cents/day amount of time premium. That will generate income and, because they are out of the money, leave room for some upside potential on the stock. Here are some examples:

3% Yield On IEFA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 60.00 0.35 25 1.4 1.54 (2.6%)
Dec 21 60.00 0.40 60 0.7 1.54 (2.6%)
5% Yield On IEFA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 60.00 0.35 25 1.4 1.54 (2.6%)
Dec 21 59.00 1.10 60 1.8 0.54 (0.9%)
10% Yield On IEFA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 59.00 0.60 25 2.4 0.54 (0.9%)
Dec 21 59.00 1.10 60 1.8 0.54 (0.9%)

Want to increase dividends with covered calls?  Sign Up For A Free Trial

 
Top 10 Open Interest For Nov 16 Expiration     Top 5 High Yield
1.SPY dividend 6.QQQ dividend   1.AMD dividend
2.EWZ dividend 7.IWM dividend   2.SNAP dividend
3.EEM dividend 8.FXI dividend   3.TWTR dividend
4.PBR dividend 9.VXX dividend   4.UVXY dividend
5.SPX dividend 10.BAC dividend   5.TSLA dividend

Want more examples? IEF Dividend | IEI Dividend