Invest in This ETF for Safety and Dividends
If your priority is to collect a good dividend and keep your portfolio safe amid all the turmoil in the markets this year, you may want to consider holding a significant position in exchange-traded funds (ETFs), which can spread out your risk over dozens of stocks. While ETFs won’t make you immune from a downturn in the overall market, they are far safer options than owning individual stocks.
An ETF that isn’t volatile and that can also provide you with some excellent dividend income is the ProShares S&P 500 Dividend Aristocrats ETF (CBOE:NOBL). It yields 2.2% and it has averaged a beta value of 0.88, indicating that it doesn’t move in sync with the market. This year, the ETF is down a little under 1%, which is still better than how the S&P 500 has performed.
The fund focuses on Dividend Aristocrats, which are companies that have been increasing their dividend payments for 25 years or more. These businesses have strong fundamentals and are well positioned to handle adversity in the economy. One-quarter of the ETF’s holdings are in consumer staples stocks, followed by 20% in industrials, and 13% in financials.
There are around 70 stocks in total in this ETF, including big names such AbbVie (NYSE:ABBV), Coca-Cola (NYSE:KO), and Johnson & Johnson (NYSE:JNJ). Over the past five years, the ProShares S&P 500 Dividend Aristocrats ETF has risen by more than 50%, and when including its dividend, its total returns are around 70%. This is a great option for buy-and-hold investors to build their portfolios around for the long haul.
