These 5 Dividend ETFs Are a Retiree's Best Friend
Retirees love dividend stocks because they produce cash flow, but yield isn't the only thing you have to consider. It's also important to understand the quality, risk, and growth potential of the stocks in your allocation. There are a few different valid approaches, depending on your investment needs and risk tolerance. No matter what you prioritize, there's a great dividend ETF for that niche.
The Vanguard High Dividend Yield ETF (NYSEMKT: VYM) is one of the most popular and straightforward funds in the high-yield business. The fund's management selects around 400 U.S.-based stocks that have the highest forecast dividends over the next year, and it's weighted by market cap. It also excludes REITs, which tend to be over-represented in dividend funds.
This Vanguard fund has a razor thin 0.06% expense ratio, and it pays a nice 2.71% distribution yield. The methodology doesn't scrutinize quality or stability in the same way, but the current income is impossible to ignore. Instead, it reduces risk through diversification. It's skewed more heavily to financials and consumer staples stocks than some of the other funds on this list.
Source Fool.com
