After spending decades working hard and saving, retirees want their portfolios to get them through. At this point in their lives, they depend on capital preservation, consistent growth and low volatility within their portfolios. To achieve this, many turn to dividend stocks. These are stocks of companies that make regular payments to investors out of their profits. But you can also invest in dividend ETFs. These professionally managed funds invest in hundreds of dividend paying stocks hand picked by professionals. But you should seek more than just high yields. The right dividend ETFs also screen stocks for features like strong financials, consistent growth and low volatility. A handful of ETFs out there exhibit these qualities.
So to narrow it down, we gathered six dividend ETFs that may help you rest easy as they put money in your pockets.
So let’s take a closer look.
Schwab U.S. Dividend Equity ETF (SCHD)
The Schwab U.S. Dividend Equity ETF (SCHD) has become popular among many retirees. And for good reason. It seeks high quality dividend paying stocks. And it also screens these stocks for strong financials like cash flow. It tracks the Dow Jones U.S. Dividend 100 Index. Its holdings are highly contracted in energy, consumer staples and healthcare. The latter two are considered defensive sectors. This means they have been known to generally remain resilient even during market downturns. Moreover, the fund delivers an impressive yield of close to 4%. And it also stands out for its low expense ratio of 0.06%. This ETF holds net assets of more than $71 billion. And it has delivered a five year return of more than 30%.
Vanguard High Dividend Yield ETF (VYM)
Vanguard has been known in the industry for its low fees. And the Vanguard High Dividend Yield ETF (VYM) is no exception. Its expense ratio is also low at 0.06%. Plus, the fund stands out for its diversification. It invests in hundreds of stocks across multiple sectors. But its main holdings are in the basic materials, consumer discretionary and consumer staples sectors. Moreover, it generates a yield of over 2%. And it holds net assets of more than $84 billion.
JPMorgan Equity Premium Income ETF (JEPI)
The JPMorgan Equity Premium Income ETF (JEPI) is an actively managed fund that seeks income in two ways. It invests in U.S. large cap stocks and sells options. It uses a proprietary research approach to gather stocks with low volatility, potentially offering retirees some peace of mind. It also screens for over and undervalued stocks with attractive risk/return profiles. Additionally, JEPI generates an impressive yield of more than 8%. Its holdings are heavily concentrated in communication services, consumer discretionary and consumer staples. The fund has net assets of more than $41 billion. And it has a competitive expense ratio of 0.35%.
Amplify CWP Enhanced Dividend Income ETF (DIVO)
The Amplify CWP Enhanced Dividend Income ETF (DIVO) also takes a two pronged approach to generating income. It does this by investing in high quality dividend paying stocks and writing covered calls on those stocks. Moreover, it screens stocks with a history of dividend and earnings growth. The fund gathers 20 to 25 stocks that are also vetted for strong financials like earnings and cash flow. The ETF delivers a yield of more than 5%. Plus, the fund has earned a four star Morningstar rating. It has net assets of more than $5 billion. But being an actively managed fund, it has a slightly higher expense ratio of 0.56%.
SPDR S&P Dividend ETF (SDY)
The SPDR S&P Dividend ETF (SDY) invests in high yield stocks that have
consistently increased their dividends for at least 20 consecutive years, delivering a degree of reliability for retirees. In addition, it screens for stocks that have experienced consistent capital growth. These stocks are known as the Dividend Aristocrats. And the fund delivers a yield of over 2%. Its main holdings are in the industrials, utilities and financial sectors. Plus, the fund holds more than $19 billion in net assets and offers a competitive expense ratio of 0.35%.
iShares International Select Dividend ETF (IDV)
To give your portfolio global exposure, you can turn to the iShares International Select Dividend ETF (IDV). It invests in high quality, non-U.S. companies that have consistently held high yields over time. And the fund generates a yield of nearly 5%. Furthermore, it has earned a three star Morningstar rating as well as a Morningstar Silver Medal. And it has delivered a five year return of nearly 27%. It diversified across multiple sectors with its main holdings being in financials, utilities and consumer discretionary. The fund holds net assets of nearly $7 billion. And it has an expense ratio of 0.50%.
Top Gaining Stocks
Top Losing Stocks