Why Dividend ETFs Deserve a Place in Your Portfolio
- Dividend Investing Strategies:
- Dividend-paying stocks have been less popular recently compared to growth stocks.
- Two common approaches are dividend growth stocks and high dividend stocks.
- Examples include Apple, Microsoft, NVIDIA, Alphabet, and Meta Platforms.
- ETFs for Dividend Investors:
- ETFs like ProShares S&P 500 Dividend Aristocrats ETF and Vanguard Dividend Appreciation ETF hold companies with consistent dividend growth.
- Covered-call ETFs are popular for generating high yields but work best in sideways markets.
- High-Income Strategies:
- Rising interest rates make money market funds and short-term bonds attractive for income-seeking investors.
- ProShares S&P 500 High Income ETF and Nasdaq-100 High Income ETF aim to balance income and total return through covered-call options.
- Podcast Discussion:
- The episode features Kieran Kirwan discussing dividend growth and high-income strategies.
- Emphasizes the importance of understanding different dividend investment approaches.
- Newsletter and Recommendations:
- Zacks offers a free Fund Newsletter for top ETF news and analysis.
- Readers can download recommendations from Zacks Investment Research for the next 30 days.
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Analyst Views on VIG
About the author
3 Defensive Dividend ETFs to Mitigate a Possible Market Decline
Market Performance: The S&P 500 has experienced three consecutive years of double-digit returns, indicating a strong market performance during this period.
Investment Strategy: Dividend investors are encouraged to explore strategies that can provide more downside protection for their portfolios in light of potential market fluctuations.
Dividend Funds Decline as Trump Aims at Defense Stock Distributions
- Trump's Economic Claims: President Donald Trump frequently highlights record stock prices as evidence of his economic success.
- Critique of Dividends: Recently, he criticized dividends, which are a significant contributor to stock market returns.
VIG vs. VYM: Which Vanguard Dividend ETF Is the Superior Investment?
Vanguard ETFs Overview: The Vanguard Dividend Appreciation ETF (VIG) focuses on long-term dividend growth stocks, while the Vanguard High Dividend Yield ETF (VYM) targets stocks with above-average yields, making them popular choices for conservative dividend stock exposure.
Performance Comparison: VYM offers a higher yield of 2.4% compared to VIG's 1.6%, and in a weakening economic environment, VYM's value-oriented nature may provide better performance due to its lower price-to-earnings ratio.
Sector Allocations: VIG has a significant allocation to technology (27.8%), which may pose risks if investor confidence declines, while VYM is more diversified across sectors, including financials and industrials, making it appear more traditional for dividend funds.
Current Preference: Given the current economic outlook and labor market challenges, the author prefers the Vanguard High Dividend Yield ETF (VYM) over the Vanguard Dividend Appreciation ETF (VIG) for its potential to outperform in a slowing economy.
Top Dividend ETFs to Consider: SCHD Offers High Yield, While VIG Emphasizes Dividend Growth
Comparison of Dividend ETFs: The Vanguard Dividend Appreciation ETF (VIG) and Schwab U.S. Dividend Equity ETF (SCHD) are leading dividend-focused ETFs, with VIG offering broader diversification and a focus on dividend growth, while SCHD provides a higher dividend yield and targets high-yielding stocks.
Performance and Yield: SCHD boasts a dividend yield of 3.8%, significantly higher than VIG's, appealing to income-focused investors, whereas VIG emphasizes long-term dividend growth, potentially leading to better total returns over time.
Portfolio Characteristics: SCHD has a concentrated portfolio with a focus on sectors like energy and healthcare, while VIG includes a larger number of holdings with a tilt towards technology and large-cap firms known for consistent dividend increases.
Investment Strategy Insights: Investors should consider their priorities—whether they seek immediate income through high yields or long-term growth through stable dividend increases—when choosing between these two ETFs.
5 Vanguard ETFs to Invest in and Hold for Future Generations
Vanguard's Investment Offerings: Vanguard is recognized for its extensive range of ETFs, making it a strong choice for long-term investors seeking diversified, low-cost investment options, particularly in large-cap and growth stocks.
Top ETFs for Long-Term Investment: The Vanguard S&P 500 ETF and Vanguard Total Stock Market ETF are highlighted as ideal long-term holdings due to their potential for capital growth, with the latter providing broader market exposure.
Growth and Dividend Strategies: The Vanguard Growth ETF focuses on high-potential growth companies, while the Vanguard Dividend Appreciation ETF targets established firms with a history of increasing dividends, offering stability and consistent returns.
Importance of Bonds: Despite the focus on equities, the Vanguard Total Bond Market ETF is emphasized for its role in providing income, stability, and diversification within a long-term investment portfolio.
Dividend Update: AT&T, Broadcom, Philip Morris, Xcel Energy, and Others
Dividend Increases: Companies such as CubeSmart, TFI International, and Pentair announced dividend increases this week, with increases ranging from 1.9% to 8%.
Dividend Declarations: AT&T, John Wiley & Sons, Williams-Sonoma, and Xcel Energy declared dividends, with amounts set for December 15 and 17.
Upcoming Dividend Calendar: Broadcom and Vistra Energy have ex-dividend dates on December 22, while Altria and Philip Morris have ex-dividend dates on December 26.
Dividend ETFs: A list of popular dividend-focused ETFs is provided for investors looking to explore dividend investment opportunities.
3 Defensive Dividend ETFs to Mitigate a Possible Market Decline
Market Performance: The S&P 500 has experienced three consecutive years of double-digit returns, indicating a strong market performance during this period.
Investment Strategy: Dividend investors are encouraged to explore strategies that can provide more downside protection for their portfolios in light of potential market fluctuations.
Dividend Funds Decline as Trump Aims at Defense Stock Distributions
- Trump's Economic Claims: President Donald Trump frequently highlights record stock prices as evidence of his economic success.
- Critique of Dividends: Recently, he criticized dividends, which are a significant contributor to stock market returns.
VIG vs. VYM: Which Vanguard Dividend ETF Is the Superior Investment?
Vanguard ETFs Overview: The Vanguard Dividend Appreciation ETF (VIG) focuses on long-term dividend growth stocks, while the Vanguard High Dividend Yield ETF (VYM) targets stocks with above-average yields, making them popular choices for conservative dividend stock exposure.
Performance Comparison: VYM offers a higher yield of 2.4% compared to VIG's 1.6%, and in a weakening economic environment, VYM's value-oriented nature may provide better performance due to its lower price-to-earnings ratio.
Sector Allocations: VIG has a significant allocation to technology (27.8%), which may pose risks if investor confidence declines, while VYM is more diversified across sectors, including financials and industrials, making it appear more traditional for dividend funds.
Current Preference: Given the current economic outlook and labor market challenges, the author prefers the Vanguard High Dividend Yield ETF (VYM) over the Vanguard Dividend Appreciation ETF (VIG) for its potential to outperform in a slowing economy.
Top Dividend ETFs to Consider: SCHD Offers High Yield, While VIG Emphasizes Dividend Growth
Comparison of Dividend ETFs: The Vanguard Dividend Appreciation ETF (VIG) and Schwab U.S. Dividend Equity ETF (SCHD) are leading dividend-focused ETFs, with VIG offering broader diversification and a focus on dividend growth, while SCHD provides a higher dividend yield and targets high-yielding stocks.
Performance and Yield: SCHD boasts a dividend yield of 3.8%, significantly higher than VIG's, appealing to income-focused investors, whereas VIG emphasizes long-term dividend growth, potentially leading to better total returns over time.
Portfolio Characteristics: SCHD has a concentrated portfolio with a focus on sectors like energy and healthcare, while VIG includes a larger number of holdings with a tilt towards technology and large-cap firms known for consistent dividend increases.
Investment Strategy Insights: Investors should consider their priorities—whether they seek immediate income through high yields or long-term growth through stable dividend increases—when choosing between these two ETFs.
5 Vanguard ETFs to Invest in and Hold for Future Generations
Vanguard's Investment Offerings: Vanguard is recognized for its extensive range of ETFs, making it a strong choice for long-term investors seeking diversified, low-cost investment options, particularly in large-cap and growth stocks.
Top ETFs for Long-Term Investment: The Vanguard S&P 500 ETF and Vanguard Total Stock Market ETF are highlighted as ideal long-term holdings due to their potential for capital growth, with the latter providing broader market exposure.
Growth and Dividend Strategies: The Vanguard Growth ETF focuses on high-potential growth companies, while the Vanguard Dividend Appreciation ETF targets established firms with a history of increasing dividends, offering stability and consistent returns.
Importance of Bonds: Despite the focus on equities, the Vanguard Total Bond Market ETF is emphasized for its role in providing income, stability, and diversification within a long-term investment portfolio.
Dividend Update: AT&T, Broadcom, Philip Morris, Xcel Energy, and Others
Dividend Increases: Companies such as CubeSmart, TFI International, and Pentair announced dividend increases this week, with increases ranging from 1.9% to 8%.
Dividend Declarations: AT&T, John Wiley & Sons, Williams-Sonoma, and Xcel Energy declared dividends, with amounts set for December 15 and 17.
Upcoming Dividend Calendar: Broadcom and Vistra Energy have ex-dividend dates on December 22, while Altria and Philip Morris have ex-dividend dates on December 26.
Dividend ETFs: A list of popular dividend-focused ETFs is provided for investors looking to explore dividend investment opportunities.
