With so many dividend ETFs available, choosing the best one might be somewhat tricky. Today, with such incredible choices available, how does one decide which one to choose and which one to skip?
If you are looking to put your money into something valuable as far as dividend ETFs are concerned, we have made the job easy by selecting the top 3 dividend ETFs for 2018.
iShares Select Dividend (DVY)
With a current dividend yield of 3.5% and an expense ratio of 0.39%, iShares Select Dividend are today’s top choice of dividend ETFs.
A high current dividend yield, there’s probably nothing better than this one out there in the market today. With its 3.5% yield, and the market’s average yield of 2%, this ETF produces an average total return of 12% yearly and has been doing so for the last 5 years.
Truth be told, investors have been looking at this fund for years, their confidence has nothing but skyrocketed in it. The fund has $17 billion invested in its ETF shares already.
iShares has become a high yield stock because of its underlying philosophy. First, this tracks the Dow Jones US Select Dividend Index, which only contains 100 stocks. Aside from that, iShares also does not employ a usual orthodox market capitalization based weighted formula for assessing how much of every one of the 100 stocks they should buy. Rather, it weighs the components using their dividends, giving higher weight to the stocks that share more of their dividend income with the shareholders.
Another reason why iShares are popular is because they have a high trading liquidity. Once you start buying them, you can buy and sell iShares ETFs easily and quite often freely which will help you save money on every trade.
iShares has my vote as on of the top 3 dividend ETFs of 2018 and not just mine but that of many others too.
Vanguard Total Stock Market ETF (VTI)
Issued by Vanguard, Vanguard Total Stock Market ETF has $103.84 billion assets under management. With a 6.60% YTD performance, it has a 0.04% expense ratio.
If you are someone who is looking to hedge their bets across different sectors and a variety of market caps, this fund should be your pick.
The Total Stock Market ETF covers the whole domestic stock market, looking after the CRSP US Total Stock Market Index. A balanced fund, it captures a good mix of both mid to small cap equities, along with blue chips. The Vanguard Total Stock Market ETF has a median market cap of about $54 billion. It also has a well-diversified sector of 3462 stocks in its basket.
With a low expense ratio, Vanguard Total Stock Market ETF has a very low expense ratio. It now trades at an all-time high, from a previous high of $146. It is trading near $150
Additionally, when investors look at ETFs, they want to put their money into something reliable and measurable. They want something long-term and concrete. This fund provides an efficient long-term performance with steady and impressive return figures. It has had decent annual returns; one year, three year and five-year returns of 16.46%, 12.19% and 12.79%, which are impressive to say the least.
A promising name, Vanguard is reigning at the top for more than one reason today. We are happy to see it outperform many other names for its promising long-term and short-term results.
ProShares Global Listed Private Equity ETF (PEX)
With a dividend yield of 20.28%, ProShares Global Listed Private Equity ETF is our third selection (with no order per se) as far as the top 3 dividend ETF funds are considered.
ProShares tracks the performance of LPX Direct Listed Private Equity Index. On March 29, the fund had 93.3% total assets as Financials, whereas 4.78% were in IT and the 1.91% was allotted in other sectors.
Moreover, North American equities had a total of 54% of the total assets whereas European equities had 44%. The other 2% were from some other countries.
ProShares top third of the funds had 30 holding accounts which had 63% assets in total. However, the last three of the holdings account had less than 14% of the total $18.8 million of the funds in assets.
What makes ProShares an excellent choice of dividend ETF today?
Well, ProShares fund yield increased from a previous 10.9% average in the last 5 years to an existing 20.28% yield because of a decline in share price. Specifically, it was a 14% 1-day drop during December 2017. The share price, since then, was at $35.50 – $36.50 but it closed $36.13 as of July 5th.
Promising, long-term and secure, ProShares Global Listed Private Equity ETF has vowed investors because of its promising results. It has been a short term and long term choice for many than most. This is because its trends and averages have improved over time and today, it is one ETF with the highest dividend yield of 20.28%.
When it comes to dividend ETFs, investments that have both high capital gains and high dividend income are quite difficult to find. This is where the thought of investors allocating a specific portion or segment of their portfolios to a high dividend ETF and then a portion of their incomes to a high capital gains stock or fund seems a viable choice.
While there are many dividend ETFs out there with promising results, there are definitely some that are better than the others. As we took a look at the best dividend ETFs for 2018, there were many to look at; GraniteShares HIPS US High Income ETF, Horizons S&P 500 Covered Call ETF, Intel Corp Common Stock, Exxon Mobil Corp Common Stock and Home Depot Inc. Common Stock are few of them.
However, as we take a further glance into how things proceeded for this year and tried to identify which dividend ETFs were still the clear highlights for the year, these three emerged as the best choices. Our picks of Dividend ETFs for this year, hence, are iShares Select Dividend, Vanguard Total Stock Market ETF and ProShares Global Listed Private Equity ETF. They are definitely some of the most promising funds out there today.
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