What is the best dividend ETF?
Cons. No guarantee of future dividends. Stock price declines may offset yield. Dividends are taxed in the year they are distributed to shareholders.
| ETF | Assets Under Management | Dividend Yield |
|---|---|---|
| VanEck BDC Income ETF (ticker: BIZD) | $919 million | 10.8% |
| PGIM Floating Rate Income ETF (PFRL) | $49.5 million | 9.7% |
| JP Morgan Nasdaq Equity Premium Income ETF (JEPQ) | $9.6 billion | 9.7% |
| iShares Select Dividend ETF (DVYE) | $670 million | 9.3% |
| Symbol Symbol | ETF Name ETF Name | % In Top 10 % In Top 10 |
|---|---|---|
| VIG | Vanguard Dividend Appreciation ETF | 32.12% |
| VYM | Vanguard High Dividend Yield Index ETF | 26.25% |
| VYMI | Vanguard International High Dividend Yield ETF | 14.46% |
| VIGI | Vanguard International Dividend Appreciation ETF | 34.27% |
| Stock | Trailing annual dividend yield* |
|---|---|
| Crown Castle Inc. (CCI) | 5.9% |
| Pfizer Inc. (PFE) | 5.9% |
| Boston Properties Inc. (BXP) | 6.2% |
| Kinder Morgan Inc. (KMI) | 6.2% |
Cons. No guarantee of future dividends. Stock price declines may offset yield. Dividends are taxed in the year they are distributed to shareholders.
ETF issuers collect any dividends paid by the companies whose stocks are held in the fund, and they then pay those dividends to their shareholders. They may pay the money directly to the shareholders, or reinvest it in the fund.
| ETF | Assets Under Management | Expense Ratio |
|---|---|---|
| Invesco QQQ Trust (QQQ) | $254 billion | 0.20% |
| Vanguard Information Technology ETF (VGT) | $70 billion | 0.10% |
| VanEck Semiconductor ETF (SMH) | $16.3 billion | 0.35% |
| Invesco S&P MidCap Momentum ETF (XMMO) | $1.6 billion | 0.34% |
| Symbol | Name | Dividend Yield |
|---|---|---|
| QRMI | Global X NASDAQ 100 Risk Managed Income ETF | 12.06% |
| PEX | ProShares Global Listed Private Equity ETF | 12.00% |
| TYLG | Global X Information Technology Covered Call & Growth ETF | 11.86% |
| SDIV | Global X SuperDividend ETF | 11.80% |
Dividends and interest payments from ETFs are taxed similarly to income from the underlying stocks or bonds inside them. For U.S. taxpayers, this income needs to be reported on form 1099-DIV. 2 If you earn a profit by selling an ETF, they are taxed like the underlying stocks or bonds as well.
Vanguard S&P 500 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VOO is a great option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market.
What are the top 3 dividend stocks?
- Hercules Capital: 10.4% dividend yield. ...
- Horizon Technology Finance Corporation: 11.7% dividend yield. ...
- Ares Capital: 9.4% dividend yield.
| Stock | Dividend yield | Dividend growth streak |
|---|---|---|
| Procter & Gamble Co. (PG) | 2.4% | 68 years |
| 3M Co. (MMM) | 6.5% | 65 years |
| Coca-Cola Co. (KO) | 3.3% | 61 years |
| Johnson & Johnson (JNJ) | 3.2% | 61 years |
| Name | Price | Analyst Price Target |
|---|---|---|
| T AT&T | $16.31 | $20.89 (28.08% Upside) |
| XRX Xerox | $16.85 | $18.50 (9.79% Upside) |
| IBM International Business Machines | $182.27 | $192.67 (5.71% Upside) |
| CVX Chevron | $158.96 | $181.87 (14.41% Upside) |
Dividend ETFs and dividend stocks can both generate income and provide long-term growth for investors. However, they both carry similar degrees of market risk. Therefore, the choice of ETFs versus stocks comes down to an investor's personal preferences, investing goals and tolerance for risk.
ETFs are subject to market fluctuation and the risks of their underlying investments. ETFs are subject to management fees and other expenses. Unlike mutual funds, ETF shares are bought and sold at market price, which may be higher or lower than their NAV, and are not individually redeemed from the fund.
Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification. But the number of ETFs is not what you should be looking at.
Over time, the cash flow generated by those dividend payments can supplement your Social Security and pension income. Perhaps, it can even provide all the money you need to maintain your preretirement lifestyle. It is possible to live off dividends if you do a little planning.
Moreover, the investor must own the shares in the ETF paying the dividend for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. This means if you actively trade ETFs, you probably can't meet this holding requirement.
Key Takeaways
Dividend ETFs are passively managed, meaning the fund manager follows an index and does not have to make trading decisions often. Dividend ETFs are good investment options for investors that are risk-averse and income-seeking.
| Exchange-traded fund (ticker) | Assets under management | Expenses |
|---|---|---|
| Vanguard Dividend Appreciation ETF (VIG) | $78.2 billion | 0.06% |
| Vanguard U.S. Quality Factor ETF (VFQY) | $324.3 million | 0.13% |
| SPDR Gold MiniShares (GLDM) | $6.8 billion | 0.10% |
| iShares 1-3 Year Treasury Bond ETF (SHY) | $24.8 billion | 0.15% |
What are the top three ETFs?
| Fund (ticker) | YTD performance | Expense ratio |
|---|---|---|
| Vanguard S&P 500 ETF (VOO) | 10.4 percent | 0.03 percent |
| SPDR S&P 500 ETF Trust (SPY) | 10.4 percent | 0.095 percent |
| iShares Core S&P 500 ETF (IVV) | 10.4 percent | 0.03 percent |
| Invesco QQQ Trust (QQQ) | 8.6 percent | 0.20 percent |
| Symbol | Name | 5-Year Return |
|---|---|---|
| IETC | iShares U.S. Tech Independence Focused ETF | 21.08% |
| SPUU | Direxion Daily S&P 500 Bull 2x Shares | 20.92% |
| AIRR | First Trust RBA American Industrial Renaissance ETF | 20.91% |
| XNTK | SPDR NYSE Technology ETF | 20.81% |
What Is a Good Dividend Yield? Yields from 2% to 6% are generally considered to be a good dividend yield, but there are plenty of factors to consider when deciding if a stock's yield makes it a good investment. Your own investment goals should also play a big role in deciding what a good dividend yield is for you.
| Symbol | ETF Name | 10y Chg 4-2-24 |
|---|---|---|
| SOXX | iShares Semiconductor ETF | 873% |
| PSI | Invesco Semiconductors ETF | 786% |
| META | Roundhill Ball Metaverse ETF | 717% |
| XSD | SPDR S&P Semiconductor ETF | 617% |
Generally speaking, fewer than 10 ETFs are likely enough to diversify your portfolio, but this will vary depending on your financial goals, ranging from retirement savings to income generation.
