Dividends are a popular source of passive income. If you don’t need the money right now, you can always reinvest your dividends to fuel your returns even further. But dividends are never promised, so relying on just a couple of stocks for their payouts is risky.
That’s where dividend ETFs, or exchange-traded funds, come in. These funds invest across many different dividend-paying companies. Even if a few reduce their dividend payments or eliminate them altogether, the impact on your income or portfolio is minimal.
Ready to use dividends to supercharge your investments? Here are three of the best dividend ETFs available.
1. Schwab U.S. Dividend Equity ETF
The fund’s largest concentrations are in financials, technology, and consumer staples. As of Dec. 31, it had 103 holdings, the largest of which were Pfizer, semiconductor manufacturer Broadcom, technology conglomerate Cisco Systems, Coca-Cola, and biopharmaceutical company Amgen.
The fund’s expense ratio is an ultra-low 0.06%. On a $10,000 investment, that translates to annual investment fees of just $6.
2. ProShares S&P 500 Dividend Aristocrats ETF
Dividend yield isn’t the only number you should focus on as a dividend investor. You want companies that have a history of regular dividend increases. Ideally, you want dividend payments that increase at a faster rate than inflation. Companies that have achieved Dividend Aristocrat status are members of the S&P 500 index that have increased their dividend payments for 25 consecutive years or more.
The ProShares S&P 500 Dividend Aristocrats ETF ( NOBL 0.36% ) is the only ETF that…
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