Dividend, REIT and High-Yield ETFs for Income | ETF Trends

Income generating exchange traded funds are the hot spot in 2012. Investors have flocked to them in droves and bid up prices, but there are still pockets of the market that offer yield as interest rates remain grounded.

“It is hard to find bargains in this market for dividend stocks,” Josh Peters, editor of Morningstar’s DividendInvestor newsletter, said in a report. “But if interest rates stay low, they continue to be the best game in town.”

The following four areas of the market are offering conservative investors a place to park capital.

Dividend investing is the oldest known trick to gain an income stream while getting exposure to shares of large, well-established companies. The iShares Dow Jones Select Dividend Index (NYSEArca: DVY) yields 3.6% while the Vanguard Dividend Appreciation ETF (NYSEArca: VIG) yields 2.16%. Both ETFs are well-established and have healthy assets under management. [Dividend ETFs: Look Before You Leap]

Real Estate Investment Trusts, or REITs, offer exposure to the slowly rebounding real estate sector of the market. These investments in shopping malls, apartment complexes, offices, and industrial facilities are a barometer of economic activity, and for the past three years real-estate mutual funds have posted a total annualized average return of around 20%, reports Jonathon Burton for MarketWatch.

Strong management and diverse geographic areas are key, along with a solid dividend track record. The iShares Dow Jones U.S. Real Estate Index Fund (NYSEArca: IYR) is up 33% this year. SPDR Dow Jones REIT ETF (NYSEArca: RWR) has gained 31%. [ETF Spotlight: Multi Asset Real Return]

Emerging markets have become a staple in most portfolios, and they are one of the best ways to gain access to fast growth in a time when developed markets have sputtered, Burton reports.