Safe ETFs with High Dividends Offer Stability and Income

Investing in safe ETFs with high dividends can provide a stable source of income and reduce overall portfolio risk.

High dividend-paying ETFs often invest in established companies with a proven track record of paying consistent dividends.

Some of the safest ETFs with high dividends include those that focus on real estate investment trusts (REITs) and utility companies, which tend to have stable cash flows and lower volatility.

These types of ETFs have historically provided a lower risk investment option with higher yields compared to other types of investments.

Here's an interesting read: Are Semiconductor Etfs a Good Investment

If you're looking for safe ETFs with high dividends, consider the S&P Global Dividend Aristocrats index, which tracks stocks from developed and emerging economies worldwide. This index includes companies with at least 10 consecutive years of a controlled dividend policy with rising or stable dividend payments.

The Vanguard Dividend Appreciation ETF (VIG) tracks this index and has a fund's dividend yield of 1.7 percent. The SPDR S&P Dividend ETF (SDY) also tracks a similar index, the S&P High Yield Dividend Aristocrats Index, with a fund's dividend yield of 2.3 percent.

Here are some key facts to consider when choosing a dividend ETF:

The S&P Aristocrats Index is a great option for investors seeking high-dividend yields. This index tracks companies that have consistently increased their dividend payments for at least 20 consecutive years.

The S&P Global Dividend Aristocrats index, for example, includes approximately 100 dividend stocks from developed and emerging economies worldwide. A company is only included in the index if it has at least 10 consecutive years of a controlled dividend policy with rising or stable dividend payments.

The index is based on the S&P Global Broad Market Index (BMI), which tracks stocks from developed and emerging economies worldwide. The selected stocks are weighted by their indicated dividend yield, and individual securities, sector, and country weightings are capped to prevent cluster risks.

Here's a comparison of the S&P Global Dividend Aristocrats index and the S&P High Yield Dividend Aristocrats Index:

The S&P High Yield Dividend Aristocrats Index, for instance, tracks companies that have consistently increased their dividend payments for at least 20 consecutive years. The SPDR S&P Dividend ETF (SDY) tracks this index, with a dividend yield of 2.3 percent and top holdings including Realty Income (O), Kenvue (KVUE), and International Business Machines (IBM).

Readers also liked: Global X Artificial Intelligence & Technology Etf

If you're looking for a safe ETF with high dividends, you'll want to compare the returns of various options. The table below shows the returns of all global dividend ETFs in comparison.

Here are some key facts to keep in mind:

The returns of these ETFs can be compared over different time periods, including 1 month, 3 months, 6 months, 1 year, and 3 years. Here are some key return figures:

These figures can help you make an informed decision about which ETF is right for you.

If you're looking for safe ETFs with high dividends, there are several options to consider.

The Schwab U.S. Dividend Equity ETF (SCHD) is a great choice, offering a 3.4% dividend yield over the last 12 months and an ultra-low expense ratio of 0.06%. This fund tracks the Dow Jones U.S. Dividend 100 index, which includes high-yielding stocks with a record of consistently paying dividends.

For investors seeking even higher yields, the iShares Preferred & Income Securities ETF (PFF) offers a 6.0% SEC yield, making it a more income-rich way to play big bank stocks. This fund holds preferred stock, which offers stability and income potential similar to bonds but with a bit more risk.

If you're looking for a more diversified portfolio, consider the SPDR Portfolio S&P 500 High Dividend ETF, which gives investors exposure to the 80 highest-yielding stocks in the S&P 500.

Investing in global stocks can be a great way to diversify your portfolio and generate passive income. Dividend stocks, in particular, offer a solid investment opportunity, with dividends contributing to the S&P 500's total returns averaging about 34 percent since the 1940s.

Companies with a history of boosting their dividend payouts every year, like the Dividend Aristocrats, tend to be more cash-rich and less risky. This makes them a good choice for investors seeking regular income in times of low interest rates.

To invest in dividend stocks worldwide, you can consider index concepts like the STOXX Global Select Dividend 100 index, which selects 100 companies from developed countries that meet criteria for high dividend quality.

The iShares Select Dividend ETF (DVY) tracks the Dow Jones Select Dividend Index, selecting high-dividend yield companies based in the United States. Its top holdings include Altria Group, AT&T, Philip Morris International, and Citizens Financial Group.

Here are some key statistics for the iShares Select Dividend ETF (DVY):

ETFs like the iShares Select Dividend ETF (DVY) and the Schwab U.S. Dividend Equity ETF can provide access to high-quality dividend stocks and generate passive income.

Indices are a great way to diversify your portfolio, as they track a specific market or sector, such as the S&P 500, which includes 500 of the largest and most stable companies in the US.

By investing in an index fund, you can gain exposure to a broad range of stocks without having to buy individual shares, which can be expensive and time-consuming.

Broaden your view: Shorting S&p 500 with Etfs

The S&P 500 index has historically provided a stable return of around 10% per year, making it a popular choice for long-term investors.

Stocks, on the other hand, offer the potential for higher returns, but also come with higher risks and more volatility, as seen in the example of Tesla's stock price fluctuating wildly over the past few years.

With stocks, you have the potential to earn significant returns, but you also risk losing money if the company performs poorly or goes bankrupt, as seen in the example of companies like Enron and Lehman Brothers.

Investing in individual stocks requires a lot of research and due diligence, as you need to thoroughly understand the company's financials, management team, and industry trends.

In contrast, investing in an index fund is a relatively passive and low-maintenance option, as the fund manager does the research and buying for you, making it a great choice for busy or inexperienced investors.

Readers also liked: What to Know about Etfs

Preferred and Income Securities can be a great way to generate income from your investments, especially for those who have reached retirement age. Dividend reinvestment into partial shares can also help your cash compound faster.

The iShares Preferred & Income Securities ETF (PFF) is a unique option that holds preferred stock rather than common stock. This hybrid asset class offers stability and income potential, but also carries a bit more risk.

With a SEC yield of 6.0%, the PFF ETF provides a more income-rich way to play big bank stocks, such as Wells Fargo, Citigroup, and Bank of America. This is more than double the yield of most other financial sector ETFs.

Preferred stock is a type of investment that's often difficult for smaller investors to access directly. However, the iShares Preferred & Income Securities ETF makes it easier to invest in this asset class.

Assets under management for the PFF ETF are $15.2 billion, and expenses come in at 0.46% or $46 annually on every $10,000 invested.

Discover more: Ishares Us Preferred Stock Etf Pff

The Schwab U.S. Dividend Equity ETF is a great option for investors looking to get the top 100 dividend stocks in one fund. It tracks the Dow Jones U.S. Dividend 100 index, which includes only high-yielding stocks with a record of consistently paying dividends.

These companies tend to have stronger financial metrics than their peers, making them a solid investment choice. The fund's top five holdings are Lockheed Martin, AbbVie, Home Depot, Blackrock, and Coca-Cola, all of which have a history of consistently increasing their dividend payments.

The fund's 10 largest holdings comprise about 40% of its value, with higher allocations of its largest holdings, which are among the highest-quality dividend-paying stocks. The Schwab U.S. Dividend Equity ETF has offered a dividend yield of 3.4% over the last 12 months, more than double the S&P 500's average dividend yield of less than 1.5%.

Here are the top 5 holdings of the Schwab U.S. Dividend Equity ETF:

Overall, the Schwab U.S. Dividend Equity ETF is an ideal fund for generating passive income, with an ultra-low expense ratio of 0.06% and a high dividend yield.

If you're looking for a safe ETF with high dividends, it's essential to consider the fund size, cost, and age of the ETF.

The Vanguard FTSE All-World High Dividend Yield UCITS ETF Distributing has a large fund size of 4,748 million euros, making it a more established investment.

The TER (Total Expense Ratio) of this ETF is 0.29% p.a., which is relatively low compared to other options.

You can also look at the list of global dividend ETFs in the table below to compare different options based on their fund size, TER, and other factors.

Some ETFs, like the Xtrackers STOXX Global Select Dividend 100 Swap UCITS ETF, have a higher TER of 0.50% p.a., which might be a consideration when choosing an ETF.

The age of the ETF is also an important factor, as it can indicate the ETF's stability and performance over time.

The Vanguard FTSE All-World High Dividend Yield UCITS ETF Distributing is a relatively young ETF, but its large fund size and low TER make it a strong contender.

You can also consider the income and domicile of the ETF, such as the iShares MSCI World Quality Dividend ESG UCITS ETF USD (Dist), which has a domicile in Ireland and a TER of 0.38% p.a.

For more insights, see: Ucits Etfs

The FTSE All-World index is the parent index to the FTSE All-World High Dividend Yield index, excluding REITs.

This index tracks high dividend stocks from developed and emerging economies worldwide, but the FTSE All-World High Dividend Yield index only selects the stocks with the highest dividend yields from this parent index.

The FTSE All-World High Dividend Yield index aims to reflect 50 percent of the parent index, making it a significant component of the global dividend market.

You might like: Ftse High Dividend Yield Index

As of June 28, 2024, the FTSE All-World High Dividend Yield index has 2,165 constituents, making it the largest available dividend index.

The selection method for this index is based on the expected dividend yield for the next 12 months, which is a straightforward approach to identifying high dividend stocks.

The selected companies are weighted by their free float market cap, ensuring that the largest and most liquid stocks have a greater impact on the index's performance.

Explore further: Largest Etfs by Market Cap

The STOXX Global Select Dividend 100 index is a great option for investors seeking safe ETFs with high dividends. It includes a selection of 100 companies from developed countries worldwide that meet criteria for high dividend quality.

The index is formed from three regional indices: STOXX Europe Select Dividend 30, STOXX North America Select Dividend 40, and STOXX Asia/Pacific Select Dividend 30. These regional indices are selected based on their indicated dividend yield and historical dividend policy.

Additional reading: Regional Bank Etf Leveraged

The index contains 40 stocks from North America, 30 stocks from Europe, and 30 stocks from Asia-Pacific. This diverse mix of stocks helps to minimize risk and maximize returns.

Here's a breakdown of the index's composition:

The index is rebalanced annually in March, ensuring that the portfolio remains up-to-date and aligned with the changing market conditions.

To choose the best high-yield ETFs to buy, we looked for funds that offer yields of at least 6%, easily outpacing the yield of the S&P 500. This is a significant consideration when seeking safe ETFs with high dividends.

Our methodology also included looking for exchange-traded funds with at least $250 million in assets under management and are well-established. This ensures that the ETFs have a solid track record and are less likely to be volatile.

We also kept in mind that the dividend yields on equity ETFs represent the trailing 12-month yield, which is a standard measure for stock funds. This means that the dividend yield is based on the income earned over the past year.

To give you a better idea of the best high-yield ETFs, here are the top options:

These ETFs have been carefully selected based on our criteria, and they offer some of the highest dividend yields available.

International companies can offer more generous payouts than domestic companies, with a dividend yield of 6.1% in the iShares International Select Dividend ETF.

This ETF provides strong income potential without the hassle of managing individual positions in international stocks, with a roughly 100-stock portfolio that includes established large-cap income players.

The iShares International Select Dividend ETF has assets under management of $4.1 billion and expenses of 0.49%.

Here are a few examples of the stocks included in the ETF's portfolio:

These stocks are similar to U.S. blue chip stocks, but offer significantly higher dividend yields than domestic peers.