If you want a good way to build up dividend income but aren’t sure which stocks to invest in, there are many exchange-traded funds (ETFs) which can make for great options. By doing the work for you finding solid dividend stocks, you can just invest in a single ETF.
One high-yielding fund that income investors might love is the Global X SuperDividend U.S. ETF (NYSE Arca:DIV). As the name suggests, you are indeed getting a super dividend with this investment. At 6.8%, the ETF gives investors a mouthwatering yield which is far higher than the S&P 500 average of 1.4%.
The way the fund is able to achieve this is by focusing on 50 top dividend stocks in the U.S. It has been making monthly distributions to investors for 11 consecutive years and the low-volatility stocks it holds can make for stable investments in the long run.
Among the top dividend stocks in the fund include Virtu Financial (NASDAQ:VIRT), Telephone & Data Systems (NYSE:TDS), and National Health Investors (NYSE:NHI). The largest holding accounts for just 3% of the fund’s overall weight so investors aren’t overly exposed to any single stock, further emphasizing the excellent diversification the fund offers.
Four sectors account for the bulk of the fund’s weight – energy (18.9%), real estate (18.8%), utilities (16.7%), and consumer staples (10.7%).
Year to date, the fund has generated modest 4.2% returns for investors but when including the dividend, the total returns rise to approximately 8.5%. If you’re an income investor looking for diversification, this is an ETF you’ll want to consider putting in your portfolio.
