Yield-Producing ETFs for a Retirement Portfolio
November 20th 2012 at 6:14am by Tom Lydon
Investors nearing retirement need to find ways to boost income and capital for their portfolios. The following income and high-yield exchange traded funds have a payout worthy of most retirement portfolios.
“So, where do you hide out when the markets are plagued with uncertainties like the potential of driving straight off of the fiscal cliff? The answer is in exchange-traded funds that pay you to ride out the storm,” Traders Reserve wrote on InvestorPlace. [ETFs for Fiscal Cliff Safety]
Retirement investors can benefit from dividends within a retirement portfolio. Dividend-yielding stocks are important because they are considered lower risk and provide a means for capital appreciation. The stock market is riddled with uncertainty due to the possibility of the fiscal cliff in January and the low yield climate that has taken over on the Federal Reserve’s low-rate pledge. Established dividend-paying stocks can help investors get through tough times with a steady income stream. [Why Dividend ETFs Remain Popular]
Many of the following dividend-focused ETFs contain companies that have solid cash balances, increasing free cash flows and low dividend payout ratios.
The iShares Dow Jones Select Dividend Index (NYSEArca: DVY) yields 3.48% and tracks some of the most well-established large cap stocks. Lockheed Martin (NYSE: LMT) and Chevron (NYSE: C) are two top quality stocks of mention. DVY is up 6.3% this year. The iShares S&P US Preferred Stock Index (NYSEArca: PFF) yields 5.71% and is up 7.9%. [Dividend ETFs: What Obama Win Means for Tax Rates]
Other dividend ETFs with decent yield:
- Guggenheim S&P Global Dividend Opportunities Index ETF (NYSEArca: LVL) yield 7.59%
- Vanguard Dividend Appreciation (NYSEArca: DWX) yield 2.11%
- WidsdomTree Equity Income (NYSEArca: DHS) yield 3.85%
iShares Dow Jones Select Dividend Index
Tisha Guerrero contributed to this article.
Full disclosure: Tom Lydon’s clients own DVY.
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.