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Getty Images. Investors rely on exchange-traded funds to give them instant diversification across a wide number of strategies: growth, value, sectors, geography … and of course, dividends. Numerous fund providers, to battle the likes of Vanguard and iShares, have put out their own specialized dividend ETFs that go a step or two past the plain-vanilla indices.

These funds look to provide income, but in smaller slivers of the market with additional benefits, such as low volatility or growth from a specific sector. But each offers some sort of differentiator that may give it a performance edge. Data is as of July 27, Yields represent the trailing month yield, which is a standard measure for equity funds.

Click on ticker-symbol links in each slide for current share prices and more. The simple idea behind this kind of fund: to gain exposure to stocks with lower volatility than the rest of the market. In theory, that should allow investors to minimize downside during market downswings, but still participate in some upside when markets rally. By adding higher dividends into the mix, SPHD should be able to provide even more downside protection against down markets.

But in practice, SPHD has been effective across long bullish periods. After all, most of these types of funds are made up of the very same stocks that trade in the major indices. Higher yields sometimes can be a result of stock-price losses; but because Dow stocks theoretically are resilient blue chips, they should bounce back, delivering not just dividends but price appreciation. The result is a diversified, balanced fund that yields 3. The sector — driven by increasingly mature companies that are looking for places to put their massive war chests to work — also is becoming a dividend dynamo.

The TDIV is a portfolio of more than 90 holdings that meet a thin set of dividend criteria — a minimum yield of 0.

Top 10 Dividend ETFs for Passive Income

And while the ETF rebalances twice a year, companies that fail any threshold are booted immediately. TDIV uses a modified market cap weighting system that factors in dividend value, and also caps how much of the portfolio any one stock can occupy. The fund also has been a fountain of dividend growth since inception, although not in a perfect straight line.

Rising interest rates can hamper stocks in a couple of ways. For one, it makes borrowing money more expensive, and thus debt repayments can siphon away profits. Also, as the yields on bonds get higher, certain dividend stocks with lower yields and stagnant payouts look less attractive as sources of income. Treasury yields. Real estate investment trusts REITs are a special equity category that were created by Congress in to give investors better access to real estate.

These companies own and often operate a wide variety of properties, from apartments and office buildings to data centers and self-storage units. But its emphasis on smaller, higher-yielding REITs does pose some performance risk, as uber-high yields can be the result of plunging stocks — which themselves are the byproduct of a deteriorating business.Dividend ETFs are an alternative or addition to individual portfolio construction for dividend growth.

Dividend Growth Investing requires a lot of due diligence in portfolio selection and maintenance. For investors who like to follow the dividend growth model but don't have the time or inclination to do the individual stock selection a Dividend ETF may be a good choice. The question is which one is the most suitable.

I will present the data and a ranking mechanism. The following 6 funds are mentioned quite often on Seeking Alpha for Dividend Investors:. I also excluded VIG due to its yield of 2. This index applies two screens to US based equities. The moat screen is applied first and then a distance to default screen. The resulting top 75 securities are generally large or mega cap value U.

It is rebalanced quarterly. The index is designed to measure the performance of high dividend yielding stocks issued by U. All of these indices seem to have a good approach so I wanted to see how the ETFs that use these indices fared in the last three years. First and very important for the dividend growth investor is the dividend growth rate. Averaging the dividend growth over the last three years comes to Using data available from Morningstar, the following table provides a quick performance and fundamentals overview:.

Looking at the table above does not provide me with a clear favorite. I like HDV's low beta and the high yield. The overall 3 yr market return with an underperformance of more than 2. All three ETFs are fairly new so 5 yr data is not available yet.

However, the underlying indices can provide an indication of a bit longer performance history:. Last but not least, let's take a look at the sector allocations and concentration risks:.

HDV has 75 holdings, of which VYM has holdings, or which This is best diversified of the 3 ETFs.

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Looking at the data shows three high quality funds. To rate which ones I like best, I assigned 1 to 5 ratings in the table below. The ratings for allocation will depend on each investor's current portfolio holdings and what they believe maybe the better performing sectors for the future. The rankings for 3 yr dividend growth, performance, current yield and volatility Beta are assigned based on the numbers in the table above. I added a row for the underlying index but I gave them all the same rating since I cannot say that one methodology is clearly better than the other.Investing for retirement usually means investing for the long term.

While long-term investing should include individual stocks, low-cost exchange-traded funds ETFs and index funds should also be part of the equation. ETFs and index funds can play pivotal roles in retirement planning because these assets can help investors reduce the burden of picking individual stocks, increase portfolio diversification and boost current income and yield, among other positive attributes.

While different investors have different objectives when it comes to retirement and it goes without saying that not all retirement portfolios will look alike, there are some universally sound choices from the world of funds that investors at varying stages of retirement planning should consider.

Here are seven ETFs and index funds that investors can buy-and-hold in self-directed retirement accounts, including individual retirement accounts IRAs. Expense ratio: 0. The Schwab U. First, with its scant annual fee of just 0. Additionally, value stocks are, on a historical basis, significantly less volatile than their growth and momentum counterparts. However, VYM also merits serious consideration by buy-and-hold retirement planners.

With an annual fee of just 0. While this retirement fund is positioned as a high-yield play, it has serious dividend growth credentials. Annual Fee: 0. In fact, in addition to the value factor, the low-volatility factor is one of the best-performing investment factors over long holding periods. SPHD carries a five-star Morningstar ratings and a distribution rate of 3.

Another SPHD perk: this retirement ETF pays its dividend monthly, creating a steadier income stream than retirement investors get with quarterly payouts. Source: Shutterstock. Target-date funds have expiration dates at which they are liquidated with proceeds returned to investors. Over the past one, three and five yearsLIRAX has bested the average returns of funds in its Morningstar peer group. Investing for retirement does not have to mean excluding international stocks.

EFAV does make good on the low volatility promise as highlighted by a three-year standard deviation of just 9. Municipal bonds are a favored asset class of retirees due to the tax benefits associated with these bonds, usually high credit quality and steady income streams. Municipal bonds issued by local and state governments in California, Illinois and New York combine for The risk in that trio is Illinois thanks to junk-rated Chicago, but California and New York are highly rated.

This article was originally published in Februay It has since been updated. As you read this, a rare set of events has created what we believe will become one of the three biggest investment opportunities of your life, no matter when you were born.

This boom will take place in the legal marijuana business. Compare Brokers. Related Quotes. Schwab U. Sign in. Sign in to view your mail. Finance Home.Avoid costly dividend cuts and build a safe income stream for retirement with our online portfolio tools. Try our service FREE. See most popular articles. You're reading an article by Simply Safe Dividends, the makers of online portfolio tools for dividend investors.

Try our service FREE for 14 days or see more of our most popular articles. The best dividend ETFs for long-term investors charge low fees, maintain nice diversification, keep turnover low, and track benchmarks that apply some filters for business quality and dividend safety. In this article, you will learn about some of the best dividend ETFs available for you to consider for your own portfolio.

While investing has no short cuts, I believe these dividend ETFs are some of the best ones out there for passive income investors. Dividend Index. This index is unique in that it selects high-yielding companies with a record of consistently paying dividends and maintaining relatively strong financial ratios.

One hundred stocks are selected to the index based on four fundamentals-based characteristics cash flow to total debt, return on equity, dividend yield, and five-year dividend growth rate. Each company is subject to screens for dividend payment consistency, size, and liquidity as well. All companies in the index have paid dividends for at least 10 consecutive years. Dividend Achievers Select Index, which focuses on stocks of large-capitalization companies that have raised their dividends for ten or more years.

As a result, the fund is concentrated in more reliable dividend-paying stocks. The stocks in the index represent the top 75 yielding stocks meeting the screening requirements. The index is created by identifying the 75 stocks with the highest dividend yields over the past 12 months, with no sector allowed to contribute more than 10 stocks.

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From those securities, 50 stocks with the lowest volatility over the past 12 months are included. Companies that are experiencing distress are likely to have more volatile stocks, which is why the fund focuses on stocks with the lowest volatility.

sphd reddit

While kicking out more volatile stocks helps, historical volatility is not a great forward-looking indicator of business quality and dividend safety. However, its substantial investments in REITs and utilities also make it more sensitive to interest rates.Investing for retirement usually means investing for the long term. While long-term investing should include individual stocks, low-cost exchange-traded funds ETFs and index funds should also be part of the equation.

ETFs and index funds can play pivotal roles in retirement planning because these assets can help investors reduce the burden of picking individual stocks, increase portfolio diversification and boost current income and yield, among other positive attributes. While different investors have different objectives when it comes to retirement and it goes without saying that not all retirement portfolios will look alike, there are some universally sound choices from the world of funds that investors at varying stages of retirement planning should consider.

Here are seven ETFs and index funds that investors can buy-and-hold in self-directed retirement accounts, including individual retirement accounts IRAs. Expense ratio: 0. The Schwab U. First, with its scant annual fee of just 0. Additionally, value stocks are, on a historical basis, significantly less volatile than their growth and momentum counterparts.

However, VYM also merits serious consideration by buy-and-hold retirement planners. With an annual fee of just 0. While this retirement fund is positioned as a high-yield play, it has serious dividend growth credentials.

Annual Fee: 0. In fact, in addition to the value factor, the low-volatility factor is one of the best-performing investment factors over long holding periods. SPHD carries a five-star Morningstar ratings and a distribution rate of 3.

고배당ETF, SPHD는 과연 좋은 종목일까?

Another SPHD perk: this retirement ETF pays its dividend monthly, creating a steadier income stream than retirement investors get with quarterly payouts.

Source: Shutterstock. Target-date funds have expiration dates at which they are liquidated with proceeds returned to investors. Over the past one, three and five yearsLIRAX has bested the average returns of funds in its Morningstar peer group.

sphd reddit

Investing for retirement does not have to mean excluding international stocks. EFAV does make good on the low volatility promise as highlighted by a three-year standard deviation of just 9.However, another common investment philosophy is to purchase a diversified portfolio of stocks with high dividend yields. One of the most common debates in investing is whether to invest in dividend-producing stocks index funds.

In this article, I make the case against dividend stocks. People love dividend stocks because it can enable you to generate a recurrent cash flow with your portfolio. I understand the attractiveness of dividend stocks. Especially among those investors who also used to investing in real estate, the concept of receiving dividends from your stock investments feels like receiving rent from your tenants. Many investors apply this mentality to stock investing, leading them towards high-dividend stocks.

While I did have a period in my life where I invested in high-dividend stocks, I currently invest in index funds and do not seek out high dividend-yield stocks. The least attractive aspect of dividend stocks is its tax inefficiency. By paying out more money in taxes, it erodes your returns. Dividends in taxable accounts are subject to taxes. The tax rates of dividends are either the long-term capital gains rate for qualified dividends or as ordinary income for non-qualified dividends.

Compared to if the stock had not paid the dividend, this distribution creates a tax drag on your portfolio, lowering your total stock return. There is a misconception that the payment of a dividend does not affect the expected return from stock price appreciation. The payment of a dividend is not a bonus. It is splitting the value of the stock into a dividend and the rest of the stock. If the stock did not fall by the amount of the dividend on the ex-div date, then traders could generate a risk-free profit arbitrage by buying the stock on the day before the ex-div date and qualify to receive the dividendand then sell on the ex-div date.

They would get the dividend essentially risk-free. They cannot perform this arbitrage because the stock falls by the amount of the dividend on the ex-div date. For some stocks with high dividends, this can cause some distress among new investors. So while the total return of a stock is its stock appreciation plus its dividend, the total return of a company is not significantly changed just because it pays out a dividend.

When you see that a stock has a high dividend yield, you have to figure out why the dividend yield is high. Is it because they offer large dividends as a company policy? Is it because the stock is undervalued? Or is the company under distress and about to cut its dividend? If the underlying financials of the company are unstable, they may be at significant risk for cutting their dividend. In that case, you would not be receiving the yield that you were hoping or planning for.

There is a common strategy of purchasing stocks that have increased their dividend for 25 or 30 years. The theory goes that these companies have stable dividends. Unfortunately, this might be a case of selection or survivorship bias. Sears Roebuck had been a successful company for over a century, but then struggled and cut their dividend. The great thing about not owning dividend stocks is that you can make your own dividends whenever you want.

If you need cash flow, just create some cash flow by selling some stock. Remember that the payment of dividends does not significantly change your expected total return, so if you were comfortable receiving dividends from the companies you own, then you should be fine creating your own dividend through selling shares. Some have suggested intentional purchasing low-dividend stocks.

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Because Berkshire Hathaway pays out no dividends, it is more tax-efficient than investing in the total stock market, which has a dividend yield of approximately 1. I personally do not invest in such a strategy, as Warren Buffett will likely no longer be with us when I would want to liquidate my taxable account.Dividend exchange-traded funds ETFs are designed to invest in a basket of high-dividend-paying stocks. These stocks may be either domestic or international and may span a range of economic sectors and industries.

However, high-dividend-paying stocks tend to be associated with companies that have a strong history of dividend increases and that usually means bigger, less-risky, blue-chip firms. Such companies include Intel Corp.

PGand Nike Inc. Dividend ETFs are favored by more risk-averse, income-seeking investors, but also are used by investors who want to balance riskier investments in their portfolio. We examine the top 3 best dividend ETFs below.

All numbers in this story are as of February 5, MSFTand Amazon. YLCO is a dividend ETF focused on the global alternative energy sector, which is comprised of companies involved in the production and distribution of solar, wind, hydroelectric, or geothermal energy. EGIE3a Brazil-based utility company. The fund follows a blended strategy, investing in both value and growth stocks.

IBMa multinational information technology firm. ETF database Inc. Top ETFs.

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