Dividends4Life: Two Dividend ETFs You Need To Know

Two Dividend ETFs You Need To Know

Posted by D4L | Sunday, May 18, 2014 | | 0 comments »

Investing in dividend-paying stocks has many advantages. A company that consistently pays dividends over many quarters is considered financially healthy with consistent cash flow. Dividend-paying companies tend to be blue chip names that are less volatile than most publicly traded companies. If held long enough, the amount of cash flow that is earned from compounding can often be sizable enough that the distributions are often used by retirees as their primary source of income.

For investors looking for an opportunity to increase exposure to dividend-paying stocks, look no farther than the Vanguard High Dividend Yield Index ETF (NYSE:VYM). This ETF has an ultra-low expense ratio of 0.10%, which, according to Vanguard, is 91% lower than the average expense ratio of funds with similar holdings. This ETF consists of 391 stocks and has total net assets of $10.9 billion. Another great option for investors looking to add dividend-paying ETFs to their portfolios is the iShares Select Dividend ETF (NYSE:DVY). This ETF is equipped with a 0.40% management fee, which is reasonable given that the managers attempt to give holders access to the top 100 dividend-paying domestic stocks based on a five-year history of dividend growth.

Source: Investopedia

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