One of the many reasons income ETFs have become all the rage in the stock market is the ease with which one can obtain both dividends and diversification in a given sector, or even across the entire market.
The protection afforded by diversification cannot be underemphasized. While a given sector can get hammered and an ETF along with it, broadly diversified ETFs — particularly those offering good dividend yields — will often be able to sustain just about anything short of a market crash.
In hunting for the safest income ETFs I could find, I wanted to find funds that were not only broadly diversified but also offered average to above-average yields.
There’s nothing wrong with your standard large-cap income ETF — they have a place in most portfolios. But if you can take advantage of something that offers both diversification and high yield … why wouldn’t you?
Here’s a look: