Vanguard Utilities Index Fund
While the Vanguard Dividend Appreciation ETF (VIG) is a good option, it’s worth noting that 24% of its holdings are in consumer goods with another 17% in consumer services. That’s a big weighting for consumer-related businesses.
If low-risk income is what you’re after, why not then just make a big play on utility stocks? These companies are essentially legalized monopolies that have high barriers to entry thanks to government regulation. They’ll never give mammoth growth, of course, but as a low-risk sector you can’t do much better than these players.
The Vanguard Utilities Index Fund Admiral Shares (VUIAX) is benchmarked to the MSCI US Investable Market Utilities 25/50 Index. That gives it a rock-bottom expense of just 0.14%, or $14 for every $10,000 invested. Top holdings right now include Duke Energy (DUK), Southern Co. (SO) and NextEra (NEE).