The 2 Best ETFs for Dividends
Investors love dividends. And why not -- they provide regular income that can be reinvested or pocketed and spent (or saved) as the investor sees fit. Many investors, particularly those in retirement, seek out stocks that provide the best dividend income. They should also know that there are exchange-traded funds, or ETFs, that produce dividends. In fact, there are an entire class of ETFs that focus on generating dividend income.
The dividend income produced by ETFs is different from that of stocks. Because there are dozens, if not hundreds, of underlying stocks within an ETF, the dividend is based on all the stocks within that ETF that pay out dividends -- calculated and distributed to investors on a pro rata basis. A potential negative is that the dividend will fluctuate more than a single stock dividend, because it's based on multiple stocks. On the other hand, the ETF dividend is from a diversified group of stocks, which means that if some are cut, others may be increasing.
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Source Fool.com
