Top 3 Dividend ETFs | Smart Change: Personal Finance
Investing for passive income is great; Dividends can pay for your living expenses, help you retire early, or you can reinvest them to generate more returns. But many stocks pay dividends, and they certainly aren’t all equal.
Exchange-traded funds (ETFs) are baskets of stocks packaged and traded under a single ticker symbol. Investing in ETFs aligned with your investment strategy is like pressing an easy button; No stress of choosing individual stocks. And yes, they make ETFs about paying dividends.
Here are three high-quality ETFs that can simplify how to invest and pay you to own them.
1. Dividend ETF
iShares Core Dividend Growth ETF (NYSEMKT: DGRO) It is an ETF designed to track the index of prominent dividend-paying US companies. The fund has a whopping 418 holdings, which means you can enjoy the security of a diversified stock portfolio with a single ticker symbol.
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The iShares Core Dividend Growth ETF is a large fund with assets totaling just under $21 billion. The fund pays quarterly dividends and has a dividend yield of 2.1%. The low 0.08% expense rate means that investors do not have to worry about fund management fees draining the returns on their investment.
The fund’s largest holdings include some of the more established US companies, such as Johnson & JohnsonAnd the MicrosoftAnd the coca colaAnd the Home Depot. Shares in information technology, finance, and health care – arguably the largest sectors of the US economy – make up more than half of the fund. The iShares Core Dividend Growth ETF is a great starting block if you’re looking for a simple basket of premium dividend growth stocks and some solid income.
2. Become a real estate investor
Vanguard Real Estate Corporation ETF (NYSEMKT: VNQ) Investors are allowed to invest in real estate without owning any real estate. An ETF includes investments in various real estate investment funds (REITs), real estate development, services, and operating companies.
REITs comprise most of the Vanguard Real Estate ETF, and their REIT exposure spans many sectors, including industrial, residential, retail, healthcare, and office real estate. ETF tracks MSCI US real estate investment market index 25/50; It has 171 total holdings and the fund’s total value is $78 billion.
The fund charges an expense ratio of 0.12%, which sounds like a competitive price for immediate exposure to real estate that you can get from equity. It also provides investors with a 3.4% dividend yield, making it a solid income investment and, perhaps most importantly, a simple way to diversify your portfolio away from traditional stocks and bonds.
3. Maximize income and reduce volatility
Invesco S&P 500 Fund with High Yield and Low Volatility Portfolio (NYSEMKT: SPHD) It is a fund created for conservative investors. It focuses on stocks and sectors with mature and established businesses, sacrificing growth for more distributed income. It has 52 holdings, built to track the S&P 500 Low Volatility High Dividend Index.
Utilities, consumer goods, and real estate make up just over half of the total funds in the ETF. The weight of any individual stock is not more than 3%, but owning the fund exposes you to many high-return stocks such as AltriaAnd the Philip MorrisAnd the AT&TAnd the chevronAnd the Kinder Morgan. The fund’s total market capitalization is $3.7 billion.
The dividend yield is 3.8%, which provides a balance between income generation and risk. The expense ratio is the highest among the three ETFs, 0.30%. Investors still pay fund managers for this high return while liquidating risky stocks that offer dividend returns but have a higher default risk.
10 stocks we like better than the iShares Core Dividend Growth ETF
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Justin Bob has no position in any of the mentioned stocks. Motley Fool has and recommends positions at Home Depot, Kinder Morgan, Microsoft and the Vanguard Real Estate ETF. The Motley Fool recommends Johnson & Johnson and Philip Morris International and recommends the following options: Long January 2024 calls worth $47.50 on Coca-Cola. Motley Fool has a disclosure policy.