Dividends are a great way to earn some cash on your investments. Just ask billionaire Warren Buffett, who netted a cool $43 million in dividends through his personal portfolio. You can do likewise, albeit on a smaller scale, with exchange traded funds (ETFs) that invest in a diversified array of top dividend-paying companies.
Last year, Warren Buffett’s personal portfolio generated a 2.3% dividend yield, reports Don Dion of The Street. Compare that to a 3.5% yield on the iShares Dow Jones Select Dividend Index Fund (NYSEArca: DVY). Yes, by owning this fund, you would have earned a greater dividend yield than Buffett! [How Dividends Can Add Oomph to Your Portfolio.]
DVY tracks the Dow Jones U.S. Select Dividend Index, which is made up of more than 100 top dividend-paying companies such as McDonald’s (NYSE: MCD) and Chevron (NYSE: CVX). Broken down, the fund is more than 25% invested in utilities and about 50% in consumer goods, industrials, and financials.
As of March 10, 2010, 10% of companies in the S&P 500 increased their dividends. With signs of a continued economic rebound and companies with strong balance sheets, that trend looks to continue.
Whether you’re looking to generate good dividend yields or establish a strong foundation for a successful ETF portfolio, DVY is one of several places you can look. We’ve listed more below! [Dividend-Yielding ETFs.]
For more stories on dividend yielding ETFs, visit our dividend ETFs category.
- iShares Dow Jones Select Dividend Index Fund (NYSEArca: DVY)
- WisdomTree SmallCap Dividend (NYSEArca: DES), 3.4% yield
- SPDR S&P Dividend (NYSEArca: SDY), 3.4% yield
- Vanguard High Dividend Yield Index (NYSEArca: VYM), 2.8% yield
- WisdomTree Dividend Ex-Financials (NYSEArca: DTN), 3.7% yield
Sumin Kim 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.