Dividend ETFs Benefit from Higher Payouts

Peter Gabriel (Photo credit: Burns!)

Dividend exchange traded funds have experienced exponential growth this year, and the case for investing in them has just gotten stronger. The paltry yield environment is expected to hang around for some time with the Federal Reserve committed to keeping rates low, so the news that U.S. stocks are expected to boost dividend cash payments is well received.
“And dividends are going to have to be a much more important component of investors’ total returns going forward. Historically, when you look back over the last 100 years, dividend yield alone averaged about 4.4%. It’s close to half of the nominal return on equities and more than half of the real return,” Josh Peters said on Morningstar. As the prospect of capital gains is less certain, investors are turning to dividends for an income stream they can count on.The market doesn’t go up 20% a year or 25% a year anymore like it did in the late 1990s, and there are no indications that this will ever repeat itself, reports Peters. ... Continue to read.

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