For example, the iShares Core U.S. Aggregate Bond ETF (NYSEArca: AGG) and Vanguard Total Bond Market ETF (NYSEArca: BND) both provide a broad, diversified approach to the fixed-income market. Both ETFs include thousands of fixed-income investment-grade securities, ranging from U.S. Treasuries, mortgage-backed securities, Agencies and corporate bonds. AGG has a 0.08% expense ratio and a 2.01% 30-day SEC yield while BND has a 0.08% expense ratio and a 2.14% 30-day SEC yield. However, potential investors should be aware that while they will still issue cash on a regular basis, the funds may see some price depreciation in a rising rate environment.
Investors can also look into the equities space for quality dividend-producing stock ETFs. The Vanguard Dividend Appreciation ETF (NYSEArca: VIG) provides exposure to high-quality stocks with steady income growth, tracking stocks that have raised their dividends for at least 10 consecutive years. For an even greater take on quality, the SPDR S&P Dividend ETF (NYSEArca: SDY) targets 50 highest-yielding stocks that have raised their dividends for every year over the past 25 consecutive years. VIG has a 0.10% expense ratio and a 1.98% 12-month yield. SDY has a a 0.35% expense ratio and a 2.29% 12-month yield. [Different Strokes With Dividend ETFs]
Alternatively, multi-asset ETFs target a group of income-generating equity and bonds. However, these portfolios are slightly more riskier due to their heavy emphasis on higher yield generation. For instance, the iShares Morningstar Multi-Asset Income Index ETF (NYSEArca: IYLD) and First Trust NASDAQ Multi-Asset Diversified Income Index Fund (NasdaqGM: MDIV) both include exposure to junk bonds and real estate investment trusts. IYLD has a 0.60% expense ratio and a 5.78% 12-month yield. MDIV has a 0.68% expense ratio and a 5.76% 12-month yield. The two ETFs also have the benefit of issuing yields on a monthly basis. [Alternative ETF Investments with Monthly Dividends]
For more information on investing toward retirement, visit our retirement category.
Max Chen contributed to this article.