The 3 Best ETFs for Dividends
In today's low-interest-rate environment, many investors are shifting their search for income from bonds to dividend-paying stocks. The biggest risk from that move is that because of the economic slowdown put in place to combat COVID-19, many companies are slashing their dividends. When a company cuts its dividend, its share price often drops, too. That leaves an investor both without the expected income and with a smaller capital base to invest, which only serves to make things worse.
A way to blunt the impact of potential dividend cuts is to buy an ETF that itself pays dividends. That way, even if some constituents of the ETF cut their dividends, the shares of other companies that managed to maintain or raise their dividends would help reduce the damage to your overall portfolio. It's still no guarantee of success, but it beats seeing your portfolio ravaged by a single major holding that's running into trouble. With that in mind, these three ETFs are among the best for dividend-seeking investors.
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Source Fool.com
