Yahoo Finance 7 Dividend ETFs for the Income-Minded Investor
Earn income with these ETFs.
Just about every long-term investor is going to have an eye on income. And dividend stocks in particular are loved by most investors, thanks to their potential not just for income growth over time but also for capital appreciation. If you don't want to pick a single stock, however, exchange-traded funds offer built-in diversification, allowing you to invest in tens, even hundreds of dividend stocks via just one buy order. And in the case of dividend stocks, ETFs allow you to deploy a wide range of income-focused tactics.
iShares Select Dividend ETF (DVY)
The DVY is one of the most straightforward dividend ETFs you can find. The fund invests in 100 U.S. companies with a history of at least five consecutive years of dividend growth (a small quality filter), including top holdings Lockheed Martin Corp. (LMT) and Philip Morris International (PM). The result is a respectable yield of more than 3 percent. And at $13.5 billion in net assets, the DVY is the second-largest dividend ETF on the market.
Yield: 3.6 percent
Expenses: 0.39 percent, or $39 annually per $10,000 invested.
ProShares S&P 500 Dividend Aristocrats ETF (NOBL)
Like the DVY, the NOBL uses consecutive dividend increases as a quality filter -- but in this case, we're talking about one of the most stringent standards. The NOBL holds Standard & Poor's 500 index dividend aristocrats -- companies that have increased their annual payout for a minimum of 25 consecutive years. NOBL yields less than DVY, but these aristocrats, such as Hormel Foods Corp. (HRL) and Clorox Co. (CLX), are a who's who of dependable dividend payers.
Yield: 2.7 percent
Expenses: 0.3 percent
ALPS Sector Dividend Dogs ETF (SDOG)
If absolute yield is more your goal, SDOG is an appropriate play. This is a twist on the "Dogs of the Dow" strategy, with ALPS investing in the five highest-yielding stocks in each of the 10 Global Industry Classification Standard sectors. The idea here is that you're not only getting high-yield stocks, but that their high yields are actually an indication of a beaten-down stock price, portending big returns.
Yield: 4 percent
Expenses: 0.4 percent
Global X SuperDividend U.S. ETF (DIV)
The DIV, which yields well more than 8 percent, certainly lives up to its name. The DIV holds 50 of the highest-yielding stocks in the U.S., with heavy weightings in utilities and mortgage real estate investment trusts. The SuperDividend U.S. ETF has some built-in protection, including 25 percent sector caps and equal weighting so no one stock has an outsized effect on the fund.
Yield: 8.5 percent
Expenses: 0.45 percent
PowerShares KBW High Dividend Yield Financial Portfolio (KBWD)
The KBWD is another source of yield, with this one focusing (as the name would indicate) on the financial sector -- banks, financial services companies and insurers, among others. What also makes KBWD stand out is that it generates its big income primarily from small-capitalization stocks that make up more than 70 percent of the fund. Top holdings include Park National Corp. (PRK) and Safety Insurance Group (SAFT).
Yield: 8.67 percent
Expenses: 2.8 percent
iShares International Select Dividend ETF (IDV)
If you're looking to diversify your dividend holdings outside of the U.S., the IDV fits the bill pretty nicely. iShares International Select Dividend holds roughly 100 international companies, with a particularly heavy emphasis on Australia (28 percent) and the United Kingdom (20 percent). Top holdings include some pretty familiar names, including AstraZeneca (AZN) and Royal Dutch Shell (RDS.A, RDS.B), that all combine to a fairly thick yield.
Yield: 4.7 percent
Expenses: 0.5 percent
WisdomTree Emerging Markets High Dividend Fund (DEM)
Emerging-market stocks aren't just a potential breeding ground for growth -- there's income in the farthest reaches of the world, too. DEM is a little financial-heavy at 26 percent of the portfolio, yet oil dominates the fund's biggest investments, with CNOOC (CEO), Gazprom (OGZPY) and Lukoil (LUKOY) resting in the top five holdings. Just two countries -- Taiwan (24 percent) and China (16 percent) -- make up 40 percent of the fund.
Yield: 6.8 percent
Expenses: 0.63 percent
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