3 Top Dividend ETFs for 2020

Investors seeking income from their portfolios have learned that dividend stocks may be the strongest investment available to them. Many great companies not only pay out generous dividends to their shareholders on a regular basis, but also have the opportunity to grow their business over time Generate more cash flow. In the long run, the combination of growth and income can provide investors with a substantial total return.

For those who don't like the idea of picking their own stocks, dividend exchange-traded funds (ETFs) offer an easy way to Make diversified investments in stocks that pay the highest dividends. In particular, the following three dividend ETFs take slightly different approaches to providing shareholders with the dividend stocks they need and the income they require Method. With many investors seeking the defensive characteristics of dividend stocks, they are particularly timely investments in 2020.

Vanguard Group High Dividend Yield (NYSEMKT:VYM)

American Wisdom Tree Medium Dividend (NYSEMKT: DON)

Vanguard Group Dividend Appreciation (NYSEMKT: VIG)

Vanguard's Two Dividend ETFs

Vanguard, a giant in the fund industry, owns two large dividend ETFs that, when invested in the dividend stock space takes a different strategy.The Vanguard High Dividend Yield ETF has a higher yield by using a simple method to Choose stocks that pay higher dividend yields than their peers for extra income. This approach creates a highly diversified portfolio consisting of 400 stocks, all weighted by market capitalization, and financial. Consumer and healthcare stocks are more concentrated.

Over the past 10 years, high dividend yield ETFs have averaged an annual yield of 12.9%, which has remained well in line with the overall market synchronization, while providing shareholders with an above-average dividend income. With a minimum expense ratio of 0.06% per annum, the high dividend yield lives up to the Vanguard Group Group's reputation for low cost growth.

Meanwhile, Vanguard Group Dividend Accretion takes a different approach. instead of emphasizing current high yields, the ETF focuses on those A stock with a long history of increasing its dividend payout year after year. This means that investors will find many stocks in the ETF's relatively low-yielding portfolio of about 180 stocks, as the The index tracked by the fund will still evaluate dividend stocks with lower yields as long as the fund is committed to increasing its payout to shareholders. In the long run.

Over the past decade, dividend appreciation has returned slightly less than other Vanguard dividend ETFs, but the average annual The rate of return of 12.6% is still substantial. Sharing the same 0.06% expense ratio, dividend appreciation is cheap for those who don't need as much dividend income now but For those who will want more in the future, ETFs are a great option.

Finding smaller dividends

The two Vanguard ETFs above focus on large-cap stocks, but the WisdomTree entrant focuses on the smaller companies. the US MidCap Dividend ETF owns 70% of the assets in the between $2 billion and $10 billion, and you'll even find larger companies in your portfolio, which are often located in large Smaller end of the company. However, just because a company is smaller doesn't mean the dividend is higher - the WisdomTree ETF ETFs' The yield is between the yields of the two Vanguard funds.

WisdomTree uses an unusual weighting system that weights stocks that pay more dividends higher than those that The weighting of stocks that pay a smaller dividend. This helps boost yields, and with more than 380 stocks in the U.S. Mid-Cap Dividend, there's plenty of diversification to offer. The higher expense ratio of 0.38 per cent per annum is one of the Fund's disadvantages, but the average annual rate of return over the past 10 years has been 13.3 per cent. , suggesting that the strategy can pay off even if the costs are high.

Getting paid to invest

These dividend ETFs offer income investors a variety of ways to generate more dividend income from their portfolios. Whether you choose one or a combination, these ETFs can provide you with exposure to dividend-paying stocks and thus potentially To generate growth and revenue in the coming years.