The world of exchange traded funds (ETFs) is always evolving to suit the needs of investors, and a number of high quality funds have popped up in recent years to serve the investing population of those seeking higher yields (i.e. those approaching, or in, retirement).
For those who fit this bill, or those of you who are neither approaching nor in retirement, but are seeking higher than average yields with the potential for growth, one ETF which should be considered is the Vanguard High Dividend Yield ETF (NYSE:VYM).
This ETF is one of the largest yield-focused ETFs, offering investors a very reasonable 3% yield while providing access to some of the highest quality companies at this yield range.
Compromising quality for yield is something far too many investors do: often abnormally high yields are indicative of abnormally high risk. A 3% yield, while not in the 5%-7% range, is meaningful, and when combined with capital appreciation potential, allows for greater peace of mind for those seeking a lower-risk place to put their money.
This ETF sorts stocks by market capitalization, meaning a higher percentage of the fund’s holdings are in companies operating in sectors such as consumer-defensive, under-weighting other names which may carry higher risk profiles by nature.
This fund has performed remarkably well of late compared to its peers, so those who are looking for an ETF with a decent track record ought to take a look at this ETF.
Invest wisely, my friends.
