|Bid||111.27 x 900|
|Ask||113.52 x 800|
|Day's Range||111.19 - 111.73|
|52 Week Range||91.68 - 113.83|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||0.94|
|Expense Ratio (net)||0.08%|
Plain-vanilla, high-quality bonds have been among the best diversifiers for equities over the past decade, eclipsing every other asset class on that front. After all, correlations data are based on past performance, and a performance pattern that held true in one market environment may not prevail into the next. In the financial crisis, for example, categories that had performed well in previous equity-market downturns, including municipal bonds, corporate bonds, and commodities, lost value amid a global flight to quality and liquidity.
How much to prepare for the potential for extended market weakness depends largely on life stage. As I noted in this video, people who are many years from retirement can reasonably choose to do nothing during a market swoon, or they may even use it as a buying opportunity. Retirees, on the other hand, tend to experience weak markets differently, and more viscerally, than their still-working counterparts.
Two money managers offer different approaches to building a portfolio that provides rising income without chasing yields.
Investors who are concerned that the trade negotiations can breakdown into a full out trade war should look to dividend growers and related ETFs. “We are thinking about some of the drivers of profit growth going forward, and we are looking at some of the communication services stocks,” Avid Kostin, Goldman Sachs chief U.S. equity strategist, told CNBC. Goldman also screens for stocks with big dividends and low labor costs in portfolios for its own clients.
Renewed trade clash between the United States and China has prompted investors to re-access their portfolio, leading to higher demand for safe-haven avenues or lower-risk securities.
Home to $32.8 billion in assets under management at the end of the first quarter, the Vanguard Dividend Appreciation ETF (NYSE: VIG) is the largest U.S. dividend exchange traded fund. VIG has attained that massive following due part to its emphasis on dividend growth stocks. Over the past three years, VIG is lagging the S&P 500 by 200 basis points, but the dividend fund has been less volatile than broader domestic equity benchmarks over that period.
The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) is one of the largest U.S. dividend exchange traded funds (ETFs) due in part to its modest fee of 0.08% per year, or $8 on a $10,000 investment. At the end of the first quarter, VIG had $32.8 billion in assets under management. VIG seeks to track the performance of a benchmark index that measures the investment return of common stocks of companies that have a record of increasing dividends over time.
Looking for a steady income stream to provide stability in your portfolio? Here are five of the best dividend ETFs to invest in this year, ranked by assets.
The first aspect to touch upon was the limitations of a market cap weighted index, which would then warrant the need for smart beta and factor strategies. While these indexes provided simple, low-cost solutions, the need for even greater scrutiny is necessary in the quest for more alpha —a case for smart beta. In addition, the simplicity of buying a broad-based market index has a concentration of risk, and should a market correction ensue comparable to that witnessed in the fourth quarter, investors are left vulnerable.
The ability to pay a dividend is also an indication of a company's financial strength and quality: Dividend payers have higher financial health grades, per Morningstar, than non-dividend-payers, and they're also more likely to have moats. There are a two key types of dividend-paying companies, which Morningstar director of global exchange-traded fund research Ben Johnson has helpfully called "growers" and "yielders." In turn, you can sort funds based on which types of companies they tend to emphasize. Growers have shown a tendency to increase their dividends over the years, which helps them deliver a pleasing balance between growing their businesses and paying income to shareholders.
Dividends can turbo-charge a portfolio over the long haul. Here are four funds that meet the criteria for solid long-term performance and low costs.
The recent passing of Vanguard founder John Bogle was a great loss for the investment world. Bogle was responsible for introducing index investing to the fund industry, and in the process, he helped millions of Americans reduce their costs and reach their retirement goals sooner.Bogle launched the first index fund in 1976 and lived to see his creations grow to a $4.6 trillion industry as of 2018. Capital continues to pour into indexed products, and Moody's predicts they will grow to represent 50% of the total investment market within five years. This popularity has grown because of index funds' numerous benefits, which include ... * Lower costs. Index funds don't need to employ teams of research analysts or portfolio managers trying to beat the market by constantly trading stocks. As a result, costs are significantly lower than actively managed funds. * Diversification. Index funds often seek to track a broad benchmark and frequently own hundreds if not thousands of different stocks, whereas the typical actively managed fund holds fewer than 100 stocks. The breadth of holdings helps reduce market risk. * Greater transparency. Index funds have a straightforward objective: match the performance of a market benchmark. These products don't suffer "style drift," which occurs when fund managers goose returns by investing in stocks that don't meet the fund's guidelines. * Superior performance. An annual fund-performance report from S&P; Dow Jones Indices showed that in 2018, the majority of actively managed large-cap mutual funds trailed the Standard & Poor's 500-stock index - for the ninth consecutive year.Here are 11 of the best index funds to buy for a variety of financial goals. This list consists mostly of ETFs but includes a few mutual fund options (including mutual fund versions of ETFs). SEE ALSO: The 19 Best ETFs for a Prosperous 2019
For those in or near retirement, the name of the game comes down to one thing -- income. Being able to turn your savings into a steady stream of paychecks after you stop working is really the only thing that matters. Luckily, the boom in exchange-traded funds (ETFs) to buy can provide investors with a great way to do just that.One of the best things about ETFs is that they have democratized a ton of different asset classes and bond varieties. In doing this, investors looking for income can find and build a portfolio for whatever demands they have. Income in retirement can be dynamic, featuring high initial yields, inflation protection, grow over time, etc. And investors can do it with single-ticker access and low-costs.In the end, the best ETFs make building a complete income portfolio a breeze and can help turn savings into a steady paycheck once you punch your last clock. All in all, they are a must-have for those in- or near retirement.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Small-Cap Stocks That Make the Grade But what are the best ETFs for investors to focus on? Here are five funds that can be used to build a complete income portfolio and remove the hassle. Best ETFs to Buy: SPDR Portfolio Aggregate Bond ETF (SPAB)Expense Ratio: 0.04% or $4 per $10,000 invested annually 12-Month Dividend Yield: 3%There's a reason why bonds are called fixed-income investments. Their stability and regular coupon payments make them an ideal base from which an income portfolio can be built. And ETFs make adding this base very simple and cost-effective for retirees.The Bloomberg Barclays U.S. Aggregate Bond Index is the benchmark for the broad bond universe and provides broad exposure to the U.S. investment grade bond universe. This includes everything from Treasury bonds, corporate bonds and mortgage pass-through securities to commercial mortgage-backed securities and asset-backed securities. As the top dog index for bonds, there is a wide variety of income ETFs that track it.But the SPDR Portfolio Aggregate Bond ETF (NYSEARCA:SPAB) may be one of the best.State Street finally got serious a few years ago about competing with the other two big dogs in the ETF world and created its own core line-up of ETFs. This includes the $3.7 billion SPAB. The fund provides exposure to all 4,855 bonds in the index and it does so at a rock-bottom expense ratio of just 0.04%. That low expense ratio allows income seekers to keep more of their bond's distribution payments- currently at 3.17% -- and provides better overall returns. And with free trading available at several discount brokers, using SPAB as core income position only gets better.By using SPAB as their core bond position, investors can gain exactly benefits ETFs were designed to provide. Vanguard Dividend Appreciation Index ETF (VIG)Source: Shutterstock Expense Ratio: 0.08% Dividend Yield: 2%Getting dividends from stocks provides something that bonds can't compete with -- the ability to grow their income potential. As cash flows and earnings increase, stocks tend to hand out more money back to shareholders. Historically, stocks have on average grown their dividends by about 5.1% per year. For retirees, this growth is critical in making sure their purchasing power keeps up with inflation.Tapping into this is the Vanguard Dividend Appreciation Index ETF (NYSEARCA:VIG).VIG's M.O. isn't about an initial high-yield -- it currently only pays 2% -- but growing that payout over time. The ETF looks at stocks that have a history of increasing dividends for at least 10 consecutive years. These "dividend achievers" are exactly what investors are looking or in order to make sure their income keeps up with inflation.The ETF tracks currently 180 top stocks, including Microsoft (NASDAQ:MSFT) and Nike (NYSE:NKE). VIG, however, does not include real estate investment trusts (REITs) or MLPs. As a result, the vast bulk of its distributions are considered "qualified dividends" for tax purposes. And as a Vanguard ETF, VIG's expenses are dirt cheap. The nearly $33 billion ETF only charges a measly 0.08% in expenses. * 15 Stocks That May Be Hurt by This Year's Big IPOs When it comes to income ETFs, VIG can play a powerful role in getting some serious and growing equity income. iShares Cohen & Steers REIT ETF (ICF)Expense Ratio: 0.34% Dividend Yield: 2.9%Speaking of those real estate investment trusts (REITs) that previously mentioned VIG avoids, they have long been a great way to boost the income generated from a portfolio. That's because REITs feature a special tax structure that allows them to push out much of their cash flows to investors. Those cash flows are driven by the rents and profits from the underlying properties they own. So as apartments, office buildings, and strip malls keep churning out rent growth, REITs' dividends rise.The same could be said for REIT ETFs like the top-notch iShares Cohen & Steers REIT ETF (NYSEArca:ICF).What makes ICF a particularly great ETF for retirees/income seekers is that ICF focus on the so-called "realty majors." Top holdings such as Public Storage (NYSE:PSA) or Equitable Residential (NYSE:EQR) are some of the leading firms specializing in their respective property types. With ICF, investors get exposure to the largest 30 REITs in the country.For income seekers, that's a place to be. For one thing, these firms' large asset bases provide plenty of cash flow and dividend stability. What it really means is a steady dividend in good times and bad. Moreover, REITs like ICF's holdings have long been able to raise their payouts at rates faster than inflation. This can provide a boost to income over time as well.With ICF added to your income ETFs, investors can add some serious current income and future dividend growth. Invesco Senior Loan ETF (BKLN)Source: Shutterstock Expense Ratio: 0.65% Distribution Yield: 4.5%Junk or high-yield bonds are a great way to score more income by moving down the credit ladder. The only problem is that junk bonds are very susceptible to interest rate hikes. And with the Federal Reserve starting to raise rates, income seekers looking to boost their incomes are facing a quandary.But here again, income ETFs can come to the rescue for a complete income portfolio.Senior bank loans are pools of corporate-issued debt that adjust rates every 30 to 90 days. The benefit of this is that as the Fed raises rates, those increases will be reflected in bank loan's coupons. The kicker is that senior loans are often issued to companies with credit ratings below investment grade. This means they offer higher starting yields than Treasury bonds. Investors get their cake and get to eat it as well.ETFs like the Invesco Senior Loan ETF (NYSEARCA:BKLN) make adding the once-hard-to-obtain asset class easy. BKLN is the largest of the ETFs in the sector and tracks the S&P/LSTA U.S. Leveraged Loan 100 Index. This index is designed to match the performance of the largest institutional leveraged loans based on market weighting, spreads, and interest payments. All in all, BKLN holds more than 118 different loans with top holdings including debt from PetSmart and Burger King. * 15 Stocks Sitting on Huge Piles of Cash With a yield of 4.5%, BKLN can add the extra oomph that income seekers need to build out their income portfolios and shows how the best ETFs can make adding exotic assets classes easy. iShares National Muni Bond ETF (MUB)Expense Ratio: 0.07% Distribution Yield: 2.5%One of the biggest headaches in managing an income portfolio is taxes. We all know the saying about death and taxes. Uncle Sam has to have his share. Lowering how much you hand over to him is very important- especially so in retirement. So, if you can pay him nothing, even better for you. That's why municipal bonds and muni ETFs are powerful tax fighting tools. Issued by local and state governments, municipal bonds are free from federal taxes and in many cases, state taxes.When it comes to ETFs, the $11.8 billion iShares National Muni Bond ETF (NYSEARCA:MUB) is the king of the muni castle.MUB's holds a whopping 3,703 tax-free muni bonds. That's an amazing amount of diversification for just only 0.07% in expenses. It also provides plenty of tax-free income firepower. The ETF currently yields 2.5%. That's not too shabby already and is about the same as previously mentioned SPAB. But that yield gets even more impressive when you factor in taxes. For someone in the highest bracket, they would have to earn more than 5.20% to get the same amount of income.And that is where munis shine. By using MUB in a taxable account, income seekers can build a tax-free base of income to supplement or support the other income ETFs on this list. For retirees, municipal bonds are a must-have investment when building their income streams.At the Time of writing, Aaron Levitt did not have a position in any of the ETFs or stocks mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 5 of the Best Stocks to Buy Under $10 * 7 Single-Digit P/E Stocks With Massive Upside * 7 Best Quantum Computing Stocks Trading Today Compare Brokers The post The 5 Best ETFs to Buy for a Complete Income Portfolio appeared first on InvestorPlace.
The exchange-traded fund marketplace is littered with a variety of terms and acronyms that have left many investors in want of a user's manual. From time to time, it is worth going back to basics to better understand the ins and outs of ETFs' mechanics to help investors use them to their best advantage. If the fund uses physical replication to track its benchmark (that is, it owns securities, not derivatives), the assets are the component securities (or a sampling thereof) of its benchmark index, any accrued income generated through securities lending, and some cash.
The U.S. equity bull market, which will turn a decade old on Mar 9, can continue its run in 2019. And these ETFs should benefit.
Given the latest economic developments, investors should stash their cash in some safe investing zones. We have highlighted them and their ETFs here.
Stock buybacks are a sign of strong profitability and shareholder-friendly management teams who understand that their employers may have better investment opportunities than they do. Invesco BuyBack Achievers ETF PKW has built a solid record by selecting stocks based on short-term repurchasing activity. Firms that repurchase their shares tend to be highly profitable, but there is little to suggest that past repurchasing activity is predictive of future performance after controlling for profitability.
Vanguard Dividend Appreciation ETF (VIG) tracks and index that focuses on stocks that have increased their dividend payments for at least ten consecutive years, observes fund expert Walter Frank, fund specialist and editor of MoneyLetter.
While accessories, dresses, gadgets and flowers are popular gifts for this day, gifting an ETF could be a great idea for money is honey, after all!
With the government shutdown now in its fourth week (the longest ever) and 800,000 federal workers on furlough, the risk of recession has increased significantly.