When it comes to investing in dividend funds, there are a few trade-offs to be aware of. Of course, everyone is looking for low-cost dividend funds, and yet low-cost dividend funds usually mean passively managed exchange-traded funds or mutual funds. That’s fine, as long as the stocks held in these low-cost dividend funds aren’t terribly volatile, and the dividend yield is reasonable. That’s just one trade-off. Expenses are going to rise as you move into higher-yielding securities that require more active management. While there are some good low-cost dividend funds out there, it is these trade-offs that I want to highlight so that investors think a little more broadly about how to construct a proper portfolio. Still, if you’re looking for the absolute lowest possible fees for your low-cost dividend funds, that tries to also aim for a decent dividend yield, here are three suggestions.
If you’re looking for a straightforward choice as far as low-cost dividend funds go, consider iShares Core High Dividend ETF (NYSE:HDV). This has all of the mega Names you know and love, with the top 10 positions accounting for about 57% of the asset base. You can take an entirely different approach with the WisdomTree US Small-Cap Dividend ETF (NYSE:DES). This four-star Morningstar rated fund has an expense ratio of 0.38%, and it offers a 12-month yield of 2.9%. Fidelity Strategic Income Fund (MUTF:FSICX) is also a four-star Morningstar rated fund, with a yield of 3.33%. It is absolutely fair to argue that the 0.69% expense ratio doesn’t really qualify this bond-centered fund as one of the lowest-cost dividend funds in the universe. However, it is not out of line for funds of its ilk.
Source: InvestorPlace
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- Should You Sell A Dividend Stock After A Dividend Cut?
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