Dividend investors what's your favorite ETF's?

[dobig]

What are your favorite dividend etf's and what are your goals (retirement income, safety, growth, etc,)? I prefer dividend growth over higher yield so currently in SCHD and VYM but would like to add some diversity for safety. Looking at SPYD and VPU but dividend growth seems lackluster but do like the funds. For myself I'm looking for income and the simplicity of in the future having the dividends deposited directly into our cash accounts for expenses.


Please no arguments from total return investors.

 

[qwerty3656]

I'm on the SCHD bandwagon

 

[dobig]

I'm on the SCHD bandwagon

Yeah when I started digging into SCHD I saw the dividend has grown from around .70 cents in 2013 to $2.65 today. If I could get half that kind of dividend growth over the next decade I'd be pretty darn happy.

 

[CyclingInvestor]

While I do not use ETFs, I have advised several income-oriented friends to use VYM.

 

[target2019]

I'm on the SCHD bandwagon

Yes, I am on that too.

 

[all4j]

Anyone interested in VIG? Not as concentrated & does prioritize growth of dividend over time (vs higher dividend now). That choice will likely (imho) determine much of the difference in future returns if you factor expenses in

 

[rsingh6675]

Checkout this CEF

Checkout this CEF
STK $28.19 (6.6% Dividend)
and let me hear your opinion.
Raj Singh

 

[yhoomajor]

SCHD
Goal - Escape velocity

 

[marko]

Small stake (<$100K) in a CEF: PDI currently running at 16% dividend. Risky, I know but the payments keep coming in every month.

 

[dobig]

While I do not use ETFs, I have advised several income-oriented friends to use VYM.

I just started buying small quantities of that last week. Currently 1% of portfolio with plan to eventually get to 10%. Current yield 3.34%. 10 year return lags SCHD 10.12% vs 11.80% but that's fine with me for diversification though I see they do hold some of the same stocks.

SCHD currently makes up 20% of our portfolio.

 

[dobig]

Small stake (<$100K) in a CEF: PDI currently running at 16% dividend. Risky, I know but the payments keep coming in every month.

I had bought some PDT, UTF and UTG on the recent dip. All around 9 - 10% dividend. Not the biggest fan of leveraged CEF's but I only have around $30k in all 3. If it works out I figure they'll pay for my property taxes in retirement off a pretty small bet.

 

[dobig]

Yeah when I started digging into SCHD I saw the dividend has grown from around .70 cents in 2013 to $2.65 today. If I could get half that kind of dividend growth over the next decade I'd be pretty darn happy.

I would like some feedback on my thinking. For simplicity say I'm investing $100k into SCHD looking for retirement income. Current yield is around 3.8%. In the past 10 years dividend has grown almost 400% albeit in a zero rate environment. Capital appreciation is almost double in that same timespan. If dividend growth is only half what it was the past 10 years I'd be looking at a dividend yield of around 7.6% while the capital appreciation should keep up with inflation. All this while taking out ALL dividends over that 10 year period. What are the potential downfalls or risks that I may not be seeing that should keep me from upping my allocation?

 

[target2019]

I would like some feedback on my thinking. For simplicity say I'm investing $100k into SCHD looking for retirement income. Current yield is around 3.8%. In the past 10 years dividend has grown almost 400% albeit in a zero rate environment. Capital appreciation is almost double in that same timespan. If dividend growth is only half what it was the past 10 years I'd be looking at a dividend yield of around 7.6% while the capital appreciation should keep up with inflation. All this while taking out ALL dividends over that 10 year period. What are the potential downfalls or risks that I may not be seeing that should keep me from upping my allocation?

I use overall allocation and SCHD (and other dividend payers) to keep my ideas in check. Today the allocation for SCHD is 2.5%. I'm using it to provide a certain amount of income each year. I add to it when I sell another dividend stock (for simplicity).

The downside is that you're giving up some growth (compare it to SCHB or SCHG).

Do you need max growth going forward from this fund? M* tells me that SCHD total performance is -5.6% for 2023. https://www.morningstar.com/etfs/arcx/schd/performance

Are you ok with the ups and downs of the NAV over the past year? A downside would be having to sell shares at a loss if you need capital.

 

[MarieIG]

All equity sectors have risks. This year SCHD has under performed the S&P due to lack of tech exposure. That said, I also have SCHD - I began dollar cost averaging into it this year, and am slightly down on the year. The dividend payers get cheaper when one can buy higher yielding treasuries and CDs.



(I added a little SCHY to the mix for foreign diversification going forward, but the percentage is small.). In my Vanguard IRA I have some VYM and VYMI (again, with the VYMI being a much smaller position.)

 

[target2019]

For tech sector, VIG has over 20%, with SCHG and VYM less. I found this on M*.
https://www.morningstar.com/etfs/arcx/vig/portfolio

I think that for any fund the top 10 holdings tell the story. VIG has APPL and MS, for example.

 

[Closet_Gamer]

I have some money VYMI, which is the International Dividend payer. Its part of my intl allocation. International holdings have been horrid for quite a while and I figure this at least puts a decent dividend against the money if the NAV continues to lag.

I also use DLN.

Its gotten pounded and I dumped it when I dumped my bond funds, but PFFD is an interesting way to get exposure to Preferred securities which have higher yields. Its a very different animal but perhaps a good way to diversif exposure.

 

[MarieIG]

For tech sector, VIG has over 20%, with SCHG and VYM less. I found this on M*.
https://www.morningstar.com/etfs/arcx/vig/portfolio

I think that for any fund the top 10 holdings tell the story. VIG has APPL and MS, for example.

VIG (and the corresponding mutual fund in my IRA) is one of my long term holdings).

 

[target2019]

VIG (and the corresponding mutual fund in my IRA) is one of my long term holdings).

I'm not picking horses, and certainly not beating yours. Lol.

SCHD focuses on high-yielding dividend stocks, while VIG focuses on companies that are increasing their dividends.
https://www.etf.com/sections/etf-basics/vig-vs-schd

 

[MarieIG]

I'm not picking horses, and certainly not beating yours. Lol.

SCHD focuses on high-yielding dividend stocks, while VIG focuses on companies that are increasing their dividends.
https://www.etf.com/sections/etf-basics/vig-vs-schd

 

[Phroig]

VIG is an excellent fund (I own the mutual fund version), but it’s not for dividend investors. I’d avoid CEFs unless you’re willing to research them and know exactly what you’re getting.

 

[Flyfish1]

Small stake (<$100K) in a CEF: PDI currently running at 16% dividend. Risky, I know but the payments keep coming in every month.

I don't think the dividend is risky. Probably a great time to buy PDI. I own some as well as PTY and PDO. PIMCO funds have a long history of paying strong dividends. As long as you understand CEF's and their inherent leverage then go for it.

 

[teej1985]

What are your favorite dividend etf's and what are your goals (retirement income, safety, growth, etc,)? I prefer dividend growth over higher yield so currently in SCHD and VYM but would like to add some diversity for safety. Looking at SPYD and VPU but dividend growth seems lackluster but do like the funds. For myself I'm looking for income and the simplicity of in the future having the dividends deposited directly into our cash accounts for expenses.


Please no arguments from total return investors.

If you prefer dividend growth over high yield, why did you choose VYM (a high yield fund) over VIG (a dividend growth fund) ?

 

[2018]

I'm also on the SCHD bandwagon with ~ 20% of my portfolio, but I also have another 12% in DGRO as it seems to have similar characteristics.


Both are low cost, but DGRO focus is more diverse in holdings (not saying this is good or bad, just different)



There are several articles comparing the two, and a smattering of the usual VIG/VYM compare for the Bogleheads.

 

[teej1985]

VIG is an excellent fund (I own the mutual fund version), but it’s not for dividend investors. I’d avoid CEFs unless you’re willing to research them and know exactly what you’re getting.

It's literally a dividend growth fund which is what OP stated is the strategy they want to pursue...

 

[target2019]

Investment approach Seeks to track the performance of the S&P U.S. Dividend Growers Index. Passively managed, full-replication approach. Fund remains fully invested. Large-cap equity, emphasizing stocks with a record of growing their dividends year over year. Low expenses minimize net tracking error. https://advisors.vanguard.com/investments/products/vig/vanguard-dividend-appreciation-etf#overview

There's differences in all of these dividend funds. One fund selects companies based on consistently growing the dividend. Another may narrow the focus, and exclude companies that are significant Growth companies (like APPL and MS).