Are you looking for an exchange-traded fund (ETF) that generates recurring income and that has also been outperforming the markets this year? One ETF that ticks off both of those boxes is VanEck Energy Income ETF (NYSE Arca: EINC). At around 4%, the fund pays a relatively high yield as the average S&P 500 stock pays less than 1.4%. For investors, that can mean some significant cash flow. Investing $50,000 into the ETF could mean $2,000 in annual dividend income.
The ETF also focuses one of the hottest sectors of 2022 – energy. It holds many of the top income stocks you can buy in the sector today, including Enbridge (NYSE:ENB), Kinder Morgan (NYSE:KMI), Pembina Pipeline (NYSE:PBA), and many others. In total, there are 30 holdings in the fund and they are primarily North American, with 71% of the ETF focused on the U.S. and 28% on Canada. And the vast majority of the stocks (88%), are large cap with valuations of more than $5 billion; there aren’t any risky penny stocks in this ETF.
Year to date, the VanEck Energy Income fund has risen 27%. If you include dividends, then its total return sits at 29%. Over the past five years, the ETF has declined 4% but when including dividends, then the total return is 38%. For investors looking to gain exposure to some stable energy stocks, this makes for a solid investment option that can allow you to achieve good diversification.
The ETF’s gross expense ratio is 0.46%, which is comparable to other funds
