The stock market has impressed in 2019, with strong growth despite volatility and uncertainty surrounding trade and the economy. Investors have seen significant gains across high performing large cap stocks, and even in low-end bargain stocks.
While raw stock price growth is great for short and mid-term traders, striking a balance between growth and dividends is important.
With a dividend-focused exchange traded fund (ETF) it’s possible to gain long term returns while leveraging the investment expertise of financial management companies.
Here are two of the best funds to consider in 2019.
Vanguard Dividend Appreciation ETF (NYSE ARCA: VIG)
Vanguard is one of America’s most popular investment and financial management companies. It owns or manages more than $4.9 trillion of assets around the world. Its ETF products are some of the most popular on the stock market, and the Dividend Appreciation ETF is a good choice for long-term investors.
This fund covers companies that have posted stable dividend increases for a minimum of ten consecutive years. This creates security for investors and results in a low 16% turnover rate.
With a yield of 1.71%, this is competitive with low-risk savings returns but not quite as impressive as the next option…
iShares Core Dividend Growth ETF (NYSE ARCA: DGRO)
As the world’s largest provider of exchange traded funds, iShares comes with a lot of industry trust. Managed by BlackRock, the Core Dividend Growth ETF focuses on stocks from companies that have consistently increased their market capitalization in recent quarters. All the popular growth stocks are covered here, including Microsoft, Apple, Verizon, JP Morgan Chase & Co., and Procter & Gamble Co.
This is a well-managed fund with a turnover rate of 26%, indicating that BlackRock is not afraid to offload stocks that are underperforming, or invest in new ones that have high potential.
The fund currently achieves a yield of 2.21%, which is higher than the average low-risk savings account.
Diversification Matters in an Uncertain Market
Diversifying your portfolio is key to securing returns in an uncertain market. Dividend growth ETFs are low-risk and can provide income without needing to constantly manage individual investments.
As with all financial decisions, perform due diligence and consider these ETFs within the context of your entire portfolio.
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