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Want Dividends? This ETF Focuses on High-Yielding Stocks
If you were to invest in the S&P 500, your dividend would average just 1.7%. With interest rates rising, that's not a particularly attractive payout. The good news is that it's easier to collect a better yield than that. And with an exchange-traded fund (ETF) you also don't need to worry about betting on just a single high-yielding dividend and whether the payout will be sustainable.
The Global X SuperDividend U.S. ETF (NYSE Arca: DIV) invests in some of the highest-yielding stocks in the U.S. It also focuses on stocks that have low betas and that aren't volatile. For eight years, the fund has been making monthly distributions and its yield is now up around 6.5%. Although the fund is down 8% this year, it has performed better than the S&P 500, which has declined 17% over the same stretch.
The ETF holds around 50 stocks in its portfolio and includes big names such as Gilead Sciences (NASDAQ:GILD), Iron Mountain (NYSE:IRM), and Kellogg (NYSE:K). The largest asset in the portfolio is Sabine Royalty Trust (NYSE:SBR), which accounts for 3.6% of the fund's total holdings, which is a good thing for risk-averse investors as it means no single-stock will have a significant impact on the ETF's performance.
At 0.45%, the ETF's expense ratio is modest compared to other funds and won't detract too much from its strong yield. If you're an investor who wants to collect a high yield without taking on significant risk, the SuperDividend ETF makes for a great option.
