Investing in exchange-traded funds (ETFs) can be a good move for the short term, and also if you're investing for the long haul and want a good investment to put in your tax-free savings account (TFSA). A terrific option to consider today is the Vanguard FTSE Canadian High Dividend Yield Index ETF (TSX:VDY).
The fund, as its name suggests, focuses on high-yielding stocks, and currently, it pays 3.2%. At a time when stock prices are up and dividend yields are down, that's a pretty good payout to be securing these days. Investors have been loading up on the ETF this year, perhaps an indication of the growing desire for some long-term safety and stability. Since the start of the year, it has risen by about 21%.
Its expense ratio of 0.22% is also modest for this type of fund, making it a suitable option for the long term. On a $10,000 investment, for instance, you'd be incurring fees of just $22 per year. Not a bad trade-off for the dividend income and stability it offers.
The fund is entirely focused on Canadian stocks and features some of the most iconic names within its top 10 in the financial and energy sectors. Royal Bank of Canada, Enbridge, and TC Energy are just a few of the prominent names you'll find among its top 10 today. These are safe stocks that are excellent dividend investments, and within this ETF, you'll have exposure to them and plenty of other stocks, as there are 61 holdings this fund, making a great way to diversify your portfolio and collect a fairly high payout.
