The Federal Reserve is doing scores of dividend stocks, exchange traded funds and other income-generating asset classes a good turn this year by delaying another interest rate increase. Providing an added boost to dividend ETFs is the utilities sector, which for most of this year, has been a stalwart performer.
Investors looking for income beyond bonds often turn to dividend stocks and ETFs. Potential investors should be aware the tax consequences as well. Dividends are passed through to ETF investors and may be taxed as qualified and ordinary income. The providers will publish the percentage of dividends paid that were qualified at the end of the year. ETFs that rebalance semi-annually or annually will lower the chance of non-qualified dividends.
CDC “suits investors seeking a dividend focus, and who also prefer the fund’s strategic beta indexing attempt to outperform the overall equity market,” adds Investopedia.
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Compass EMP US EQ Income 100 Enhanced Volatility Weighted Index ETF
