The average stock on the S&P 500 pays investors a dividend of 1.5%. That's not a terribly high rate but the good news is that there are some attractive exchange-traded funds (ETFs) that pay much better than that.
The SPDR Portfolio S&P 500 High Dividend ETF (NYSE Arca:SPYD), for instance, yield 4.4% and holds a wide array of stocks in its portfolio. By investing in a pool of stocks through an ETF, investors don't have to worry about whether one particular investment is in danger of cutting its payouts or if it will stop paying dividends entirely.
There are more than 80 stocks in the fund, and a quarter of them are from the financial services sector. And real estate, utility, and energy stocks each make up 10%. Some of the more notable names in the ETF include Seagate Technology (NASDAQ:STX), U.S. Bancorp (NYSE:USB), and Exxon Mobil (NYSE:XOM).
The average holding trades at a fairly modest 18 times earnings. Investors aren't paying a big premium for the ETF and it has risen 22% already this year while the S&P 500 is up by only 11%.
With both a high yield and a great return, this is an ETF that could have generated some solid profits for your portfolio. And given that it still isn't an expensive buy, it may not be too late to invest in it.
At a miniscule gross expense ratio of just 0.07%, this isn't a fund that will put any dent in your total earnings, either.
