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For income-oriented investors, dividend ETFs can be an attractive option for generating steady cash flow. These funds provide exposure to a diversified portfolio of dividend-paying companies, often with lower volatility than individual stocks. Let’s take a look at three reliable dividend ETFs with solid track records and a risky option with extremely high returns for those willing to take on more risk in search of higher returns.
Reliable Option 1: Invesco High Yield Equity Dividend Achievers ETF
The Invesco High Yield Equity Dividend Achievers ETF (NASDAQ:PEY) focuses on companies with a history of consistently increasing dividends. With a trailing 12-month yield of 5.03% and a 10-year annualized total return of 7.79%, PEY offers an attractive combination of income and growth.
The fund’s largest holdings include Walgreens Boots Alliance Inc. (WBA), Verizon Communications Inc. (VZ) and Universal Corp/VA (UVV).
Reliable Option 2: ProShares S&P 500 Dividend Aristocrats ETF
The ProShares S&P 500 Dividend Aristocrats ETF (BATS:NOBL) invests in companies that have increased their dividends for at least 25 consecutive years. Although the trailing 12-month yield of 2.09% is lower than some other dividend ETFs, NOBL’s focus on consistent dividend growth rates has helped it deliver an impressive 10-year total return of 9.02%.
Top holdings include Albemarle Corp. (ALB), Dover Corp. (DOV) and 3M Co.
Look at that: Passive income investing is one of the most reliable ways to survive a recession. Therefore, it is not surprising that people resort to high-yield real estate bonds, which have a fixed return of 7.5% to 9%.
Reliable Option 3: SPDR Portfolio S&P 500 High Dividend ETF
The SPDR Portfolio S&P 500 High Dividend ETF (NYSE:SPYD) targets the 80 highest-yielding stocks in the S&P 500 index. With a trailing 12-month yield of 4.61% and an annual total return of 8.03% since its inception in October 2015, SPYD offers a compelling mix of high income and capital growth potential.
The fund’s largest holdings include Hasbro Inc. (HAS), Public Service Enterprise Group (PEG) and Iron Mountain Inc. (IRM).
Risky option with extremely high returns: VanEck Vectors Mortgage REIT Income ETF
The VanEck Vectors Mortgage REIT Income ETF (NYSE:MORT) is an interesting option for investors willing to take on more risk in exchange for potentially higher returns. This fund invests in mortgage real estate investment trusts (mREITs), which typically offer significantly higher returns than traditional equity REITs. MORT currently has a trailing 12-month return of 11.85%, but its 10-year loss of 54.51% highlights the risks associated with this asset class. mREITs are particularly sensitive to changes in interest rates and the regulatory environment, making them a more volatile and speculative investment.
Top holdings include Annaly Capital Management Inc. (NLY), AGNC Investment Corp (AGNC) and Starwood Property Trust Inc. (STWD).
Alternative high-yield options
While dividend ETFs can be a great source of passive income, investors seeking higher returns may want to consider alternative investment options. Two of these options are Arrivald and Basecamp Alpine Notes.
Arrived is a real estate investment platform that allows individuals to invest in shares of rental properties for as little as $100. With an average dividend yield of 4.2%, Arrivald offers investors the potential for stable rental income and long-term appreciation, without the hassle of a landlord. Investors who want to take an even more passive approach can diversify their real estate holdings with Arrivald’s Single Family Residential Fund. The fund offers investments in several rental properties in the most promising real estate markets. View currently available investment properties on Arrival.
Basecamp Alpine Notes, offered by EquityMultiple, are short-term, high-yield investment opportunities backed by real estate. These notes are exclusive to first-time investors on the platform and offer a target APY of 9.00% over a three-month term with a minimum investment of just $1,000. EquityMultiple’s first loss protection feature aligns the platform’s interests with those of its investors, as in the event of a default, the company would lose its entire investment before investors would lose a single dollar. See how much you could earn with Basecamp Alpine Notes.
Dividend ETFs can be an effective tool for generating passive income, but it is important to understand the risks and rewards associated with each option. While the three reliable ETFs discussed above offer a balance of returns and stability, the risky, extremely high-yield MORT ETF highlights the potential pitfalls of chasing yield without proper due diligence. For investors seeking even higher returns and willing to explore alternative investments, platforms like Arrivald and EquityMultiple’s Basecamp Alpine Notes offer exciting opportunities to diversify their income streams beyond traditional dividend ETFs.
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This article 3 Reliable and 1 Risky High-Yield Dividend ETFs to Boost Your Passive Income Game originally appeared on Benzinga.com