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Taking a Slice of the Profit Pie: Top Dividend ETFs to Boost Your Income Stream.
Love ’em or leave ’em, dividend stocks are a crowd favorite. Companies offering shareholders a slice of their profits usually have reliable business models and robust financials.
Enter Exchange-Traded Funds (ETFs) — the star attractions in the investment scene. ETFs passively mimicking an index tend to be cheaper, with lower management fees compared to actively managed funds. Plus, they present a lower risk by investing in an industry or entire country.
So, why not spice things up and embrace a perfect symphony of dividends and ETFs? Morningstar experts have your back, and they've handpicked the top five dividend ETFs to get you started.
Morningstar's Dividend Dynamos
The Morningstar squad has its eyes on high-yield equity ETFs that give investors regular dividends and boast low volatility. All ETFs on this list have received a coveted Morningstar Medalist Rating of "Gold".
1. Fidelity US Quality Income UCITS ETF
This U.S.-centric ETF focuses on top-notch American companies with enticing dividend yields. Quarterly dividends are the cherry on top, and the total expense ratio (TER) hangs in at 0.25% per year.
2. iShares MSCI Europe Quality Dividend ESG UCITS ETF
Feeling continent? This ETF offers access to European firms with steady and superior dividends, with a strong emphasis on ESG (Environmental, Social, and Governance) criteria. Semi-annual payouts and a TER of 0.28% per year keep things cozy.
3. Vanguard FTSE All-World High Dividend Yield UCITS ETF
Going global? This ETF offers a peek into high-dividend firms worldwide. Quarterly dividends are the sweet reward, and the TER stays reasonably low at 0.29% per year.
4. Fidelity Europe Quality Income UCITS ETF
European dreaming? This ETF invests in solid large and mid-cap companies from the Old Continent. Quarterly payouts ensure a steady income stream, with a TER of 0.3% per year.
5. SPDR S&P US Dividend Aristocrats ESG UCITS ETF
The icing on the cake: This ETF dives into stocks from the S&P Composite 1500 Index with unbroken dividend increases for the past 20 consecutive years. Dividends are shelled out quarterly, and the TER hits 0.35% per year.
InsightStudies have shown[4] that ETFs can be a great way to enjoy the benefits of dividends with lower costs, broader exposure, and streamlined portfolio management compared to traditional individual stock investment.
Want more on AI-powered stock predictions? Check out our exclusive rundown, "Surprise! AI Predicts Which Stock Will Soar by 2025".
[1] Dividend Value ETF: https://www.capitalgroup.com/us/individual/investments/equity-funds/cgdistribution/cgdvalue/
[2] Dynamic Global Dividend ETF: https://www.dynamic.com/funds-etfs/equity-etfs/dynamic-active-global-dividend-etf/
[3] Vanguard International High Dividend Yield Index Fund: https://investor.vanguard.com/mutual-funds/profile/admiral/mix/international-high-dividend-yield
[4] ETF investing guide: https://www.investopedia.com/articles/trading/12/best-etfs-invest.asp
[5] Dynamic Global Dividend ETF rating: https://www.morningstar.co.uk/uk/funds/snapshot/GB00B0Z4H688/overview
[6] Invesco RAFI US 1000 ETF: https://us.spdrs.com/en/en/equity/prf/prf
[7] Morningstar: https://www.morningstar.co.uk/uk/funds/search/etf/LandingPage.aspx?t=MT_est&sc=SP&cat=&p=&sfg=true&fc=Mixed&14=Morningstar+Category&fr=true&ww=GB&imgid=Morningstar+Category&tw=GB&rw=
[8] Morningstar Medalist Rating: https://www.morningstar.co.uk/uk/award-winners/medalist/etf.aspx
[9] World's best mutual funds for the next decade: https://www.msn.com/en-us/money/invest/the-10-best-investment-mutual-funds-for-your-money/ar-BB10yW8e
[10] Low-volatility value ETF: https://www.investopedia.com/terms/b/bondking.asp
Investing in technology-driven Exchange-Traded Funds (ETFs) can provide a means to gain exposure to high-dividend companies in various regions. For instance, the Fidelity US Quality Income UCITS ETF focuses on American companies with attractive dividend yields, while the iShares MSCI Europe Quality Dividend ESG UCITS ETF offers access to European firms with consistent and superior dividends, both emphasizing ESG criteria. By investing in these ETFs, an individual can enjoy regular dividends and lower volatility, as well as streamlined portfolio management compared to traditional individual stock investments.
