© Reuters. 4 Dividend-Paying ETFs to Buy Now
Because concerns related to high inflation and a resurgence of COVID-19 cases could keep the overall stock market under pressure in the near term, we think it could be wise to bet on dividend-paying ETFs to ensure a steady stream of income. To that end, Vanguard Dividend Appreciation Index Fund ETF Shares (VIG), iShares iBoxx $ High Yield Corporate Bond ETF (HYG), SPDR S&P Dividend ETF (SDY), and Utilities Select Sector SPDR Fund (XLU) could be solid bets now. Let’s discuss.Many analysts fear the spread of the hyper-contagious Delta variant of COVID-19 in several countries could stall global economic growth. This, along with a decline in consumer sentiment and rising inflation, has of late been driving significant volatility in the stock market. The consumer price index increased 5.4% in June, its largest year-over-year jump since August 2008.
Against this backdrop, investors are turning to dividend-yielding stocks to hedge their portfolios against market volatility by ensuring a steady income stream. However, because betting on dividend-paying stocks can be risky too, because many of them could suffer a correction with the broader market, it could be wise to invest in dividend-paying ETFs to ensure broader portfolio diversification at lower risk.
Considering these factors, we think dividend-paying ETFs Vanguard Dividend Appreciation Index Fund ETF Shares (VIG), iShares iBoxx $ High Yield Corporate Bond ETF (HYG), SPDR S&P Dividend ETF (SDY), and Utilities Select Sector SPDR Fund (XLU) are solid bets now.
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