Call It a Comeback: Dividend ETFs for the Income Investor

February 25th at 1:00pm by Tom Lydon

ETF dividendYields have been dropping so low we could soon need to dig up a microscope to find them. If you’re an income-oriented investor, don’t lose heart – dividends and making a comeback and exchange traded funds (ETFs) will give you access to them.

After the financial crisis, many banks and other financial companies reduced or suspended dividend payments, remarks Alexander Green for Investment U. But according to Howard Silverblatt, senior index analyst at S&P, “the worst is over for dividends. Standard & Poor’s believes that a dividend recovery is under way.” [How to Play the Dividend Comeback.]

While dividends may still be low at this point, Green points out that over time, they rise and sometimes it’s by a lot. [How to Protect Yourself from the Big Deficit.]

Gary Gordon for ETF Expert makes another case for dividends: the markets are showing no definitive signs of a fast revival or another downturn. In that situation, Gordon suggests, you might want to go after cash flows from income ETFs or dividend-yielding ETFs. [4 Ways to Use ETFs.]

For more information on dividend ETFs, visit our dividend category. Among the many dividend ETFs available for the picking (just watch the trend lines) include the ones listed below. You can find the fund’s current yield by clicking on the ticker:

  • PowerShares HighYield Dividend Achievers (NYSEArca: PEY)
  • WisdomTree SmallCap Dividend (NYSEArca: DES)
  • First Trust DJ Global Select Dividend (NYSEArca: FGD)
  • WisdomTree Total Dividend (NYSEArca: DTD)
  • Claymore/Zacks Dividend Rotation (NYSEArca: IRO)
  • iShares Dow Jones Select Dividend Index (NYSEArca: DVY)
  • Vanguard Dividend Appreciation ETF (NYSEArca: VIG)

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.