VWO Dividend Type Payments

Vanguard FTSE Emerging Markets ETF dividend

Although VWO has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Vanguard FTSE Emerging Markets ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):

Vanguard FTSE Emerging Markets ETF (VWO)
Bid Ask Last Change Volume P/E Market Cap
52.15 52.18 52.17 +0.90 6.5M - 63B

VWO Dividend-Like Income Using Covered Calls

With VWO at 52.17, here's a table showing how big the annual "dividend" (i.e. 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% 1.57 0.4
5% 2.61 0.7
10% 5.22 1.4

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 VWO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 52.00 1.05 57 1.5 0.00 (0.0%)
Sep 19 52.00 0.80 29 2.1 0.00 (0.0%)
5% Yield On VWO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 52.00 1.05 57 1.5 0.00 (0.0%)
Sep 19 52.00 0.80 29 2.1 0.00 (0.0%)
10% Yield On VWO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 52.00 1.05 57 1.5 0.00 (0.0%)
Sep 19 52.00 0.80 29 2.1 0.00 (0.0%)

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