Dividends and diversification – these two things can help you achieve a comfortable retirement when combined with the income you will receive from Social Security.
One way to get both dividends and diversification is to invest in exchange-traded funds (AND F) who own baskets of dividend-paying stocks. These three dividend ETFs fit the bill perfectly.
1. SPDR S&P Global Dividend ETF
State StreetIt is SPDR S&P Global Dividend ETF (WDIV 1.05%) offers an easy way to invest in a large number of global companies with high dividend yields. Even better, the ETF looks for companies that have increased or maintained their dividends for at least 10 consecutive years.
The SPDR S&P Global Dividend ETF holds 100 shares. No country can have more than 20 shares in the ETF. No sector can represent more than 25% of its assets. In addition, the maximum weighting a stock can have in the portfolio is 3%. Currently, the most weighted security represents only 1.58% of the value of the portfolio.
State Street launched the ETF in May 2013. Since then, its net asset value has increased by 4.35% on average annualized.
This ETF currently offers a 30-day SEC dividend yield (a standardized annual yield that uses the last 30 days’ net investment income) of 4.78%. The main drawback of the SPDR S&P Global Dividend ETF is its relatively high expense ratio of 0.4%.
2. Vanguard International High Dividend Yield Fund
Vanguard Markets several dividend ETFs retirees might like. It is Vanguard International High Dividend Yield Fund (VYMI 0.57%) particularly stands out. As its name suggests, this ETF offers exposure to international stocks that are expected to offer above-average returns.
The Vanguard International High Dividend Yield Fund currently holds 1,302 shares. It focuses on large-cap value stocks. The median market capitalization of the companies in his portfolio is $43.2 billion, and they have an average price-to-earnings ratio of 9.0. The fund’s top holdings now include Shell, rock, Novartis, ToyotaAnd HSBC.
Although the Vanguard International High Dividend Yield Fund has higher risk than some ETFs, it also offers higher return potential. Its net asset value has increased by an annualized average of 7.14% since its launch in February 2016.
The ETF’s yield currently stands at 4.53%. Its expense ratio is 0.22%, which is higher than several Vanguard ETFs but lower than other dividend ETFs on our list.
3. Invesco S&P 500 ETF with high dividends and low volatility
Retirees like high dividend yields and low volatility. Invesco operates an ETF which aims to provide both – the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD 0.66%).
This ETF holds around 50 constituents of the S&P 500 that have above-average dividend yields and a history of low volatility. His portfolio is primarily focused on large and mid-cap value stocks. Current top holdings include AT&T, Altria Group, Verizon CommunicationsAnd Morgan Children.
Invesco first offered the ETF in October 2012. Since then, it has seen an average annual net asset value growth of 9.13%.
The ETF’s 30-day SEC dividend yield currently stands at 4.59%. Its fee rate is 0.3%.
HSBC Holdings is an advertising partner of The Ascent, a Motley Fool company. Keith Speights has no position in the stocks mentioned. The Motley Fool holds positions and recommends Kinder Morgan. The Motley Fool recommends HSBC Holdings, Roche Ag and Verizon Communications. The Motley Fool has a disclosure policy.