Dividend investing is a time-tested strategy that might appeal to many retail investors. The yield, particularly in the current period of record low interest rates, is important for many passive-income seekers, including retirees. Individuals can also reinvest those dividends to buy more shares and their portfolio will also benefit from the effects of compound interest.
We discussed dividends in previous articles (for example, here, here, here, and here). Today, we extend the discussion by introducing two other funds.
- UTILITIES SELECT SECTOR SPDR FUND
Current Price: $61.58
52-Week Range: $43.44 - $67.93
Dividend Yield: 3.19%
Expense Ratio: 0.12% per year
Broader markets have become volatile again. Therefore, in addition to dividend income, many retail investors are also seeking long-term stability. Given the regular need for water, electricity and gas, utilities are regarded as defensive shares.
Most countries regulate utilities, meaning they typically have modest but steady profits as well as high cash flows. Thus, utilities stocks tend to have juicy dividends.
The Utilities Select Sector SPDR® Fund (NYSE:XLU) gives access to businesses from the utilities, independent power producers and renewable energy groups. Since its inception in December 1998, assets under management have grown to $11.74 billion.
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