How to Play the Dividend Comeback With ETFs
January 29th at 12:00pm by Tom Lydon
As the markets waver and look for direction, you may be on the hunt for assets that are higher quality. Dividend-focused exchange traded funds (ETFs) may be just the ticket.
As the threat of more dividend cuts are likely behind us and the global economy regains its health, dividend-focused investors are coming back on the scene. Aaron Levitt for Investopedia says that dividend ETFs are also making a safe place for investors to stash gains that have previously been made from riskier asset sales. [Why dividend ETFs are good for a portfolio.]
Dividend ETFs are an ideal way to get exposure to dividend stocks. The providers behind such funds have worked hard to assemble a basket of the highest quality and most reliable dividend payers, saving you time and money.
There are a number of dividend ETFs available, including the ones listed below. [Are dividend ETFs solid for 2010?]
For more stories about dividend ETFs, visit our dividend ETF category.
- Wisdom Tree Dividend ex-Financial (NYSEArca: DTN): yields 3.9%; Especially interesting because it excludes the financial sector, something many investors may be wary of right now. WisdomTree is one of the most prominent names in the industry when it comes to dividend investing.
- iShares Dow Jones Select Dividend Index (NYSEArca: DVY): 4.2% dividend yield; The most popular dividend ETF, this fund holds the bulk of the assets in this space, and uses Treasury-beating, growth stocks.
- PowerShares High Yield Dividend Achievers (NYSEArca: PEY): offers a 4.7% dividend yield. PEY also may be of interest to investors because of the ETF’s policy of monthly income distributions. The fund is heavily weighted towards financial stocks, with 39% of assets in the sector.
- Vanguard Dividend Appreciation (NYSEArca: VIG): yields 2.1%; VIG tracks the stock of companies that have a history of increasing dividends. Investors are sacrificing current income for the chance to take part in long-term income potential, Levitt says.
