Getting Paid in a Volatile ETF Market
September 3rd 2010 at 1:00pm by Tom Lydon
It may be a tough time to trade in the markets and exchange traded funds (ETFs), but that doesn’t mean that there aren’t some good picks still out there. Dividend-related ETFs are attracting more investors who want some stable returns in a volatile market.
Dividend-yielding investments provide some advantages, remarks Donald Jay Korn for Black Enterprise. Even if a dividend-bearing investment is turning out 2% or 3%, an investor is still getting a some decent returns, considering the alternatives. Some studies have shown that dividend-paying stocks have significantly outperformed non-dividend payers in down markets going as far back as 1970. [ETFs That Yield More Than Your Savings Account.]
Additionally, “qualified dividends,” those paid out by most companies, are taxed up to 15% for 2010. Investors with a taxable income of $34,000 or less, or $68,000 for married couples, owe nothing for these types of dividends. [ETFs to Look At In a Low-Yield World.]
Companies that generate dividends are generally those that generate excess cash. So it is safe to say that these are usually quality companies that reward long-term investors. [Dividend Paying ETFs: Where to Look.]
Dividend funds are either ones that focus on high-yielding stocks, and funds that have low dividends but hold stocks that historically raise dividends.
For more information on dividends, visit our dividend ETFs category. You can find all of the available dividend ETFs by stopping by the ETF Analyzer. Once there, you can sort by yield, performance, assets and much more. To research any individual ETF further, click on the ticker symbol to get to the ETF Resume page.
- iShares Dow Jones Select Dividend Index (NYSEArca: DVY)
- SPDR S&P Dividend (NYSEArca: SDY)
- WisdomTree International LargeCap Dividend (NYSEArca: DOL)
- Vanguard Dividend Appreciation (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. 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.