A Core ETF Idea for Dividend Investors

In October, BlackRock, the parent company of iShares, lowered HDV’s annual fee to 0.08% from 0.12%. That means HDV charges just $8 per year on a $10,000 investment and that also means it is one of the least expensive dividend ETFs trading in the U.S.

Investors can also look to diversify with stable, dividend-paying stock ETFs in uncertain times. There are a number of broad ETFs that target stocks with a history of consistently raising dividends as a way to generate more attractive returns and to gain exposure to more quality names.

High-yield dividend exchange traded funds offer attractive yields for the income-strapped investor, but the higher payouts come with risks, such as potentially unsustainable dividends.

In terms of higher yielding sectors, HDV allocates 26% of its weight to consumer staples stocks and another 19.3% combined to telecom and utilities names. HDV has a trailing 12-month dividend yield of 3.2%, which is a fair bit above the yield on 10-year Treasuries.

“A forward-looking evaluation of the strength of each company’s balance sheet, ranking companies on their likelihood of financial distress and only selecting those at the least risk of default,” according to the Seeking Alpha analysis on HDV.

For more news and strategy on the Dividend ETF market, visit our Dividends category.