My Favorite ETFs of 2021
Updated: Dec 24, 2022
It’s no secret that I’m a huge follower of dividend growth investing. My choice in ETFs follows suit with picks to help build passive income into and through retirement. I've chosen these ETFs for their low expense ratios and track record of delivering results. Past performance doesn't always equal future performance. ETFs trade like stocks, with the ability to buy and sell as needed, but give great diversity. All you need is enough to purchase one share. Below is a short list of my favorite Exchange Traded Funds (ETFs) and why:
Interested in starting you own Dividend Investing journey? Check out my Ultimate Dividend Investing Guide and personal Dividend Growth Portfolio!
Schwab U.S. Dividend Equity ETF (SCHD)
Tracking the Dow Jones U.S. Dividend 100 Index, SCHD has returned an a average of 15.46% since inception in October 20 2011. Couple that with a respectable dividend yield of 2.87% and a bottom shelf expense ratio of .06% and you get a great ETF. A solid first choice for the foundation to your passive income portfolio. The fund focuses on solid dividend companies with at least 10 years of dividend payments.
iShares Core Dividend Growth ETF (DGRO)
DGRO is a hybrid ETF that looks to build equity growth and payout dividends. It focuses on companies that have grown their dividends for at least five years and tracks the Morningstar US Dividend Growth Index. The ETF has returned 13.09% since inception on June 10th 2014. A marginal expense ratio of .08% makes this a great ETF for investors looking for dividend growth.
JPMorgan Equity Premium Income ETF (JEPI)
JEPI is an ETF designed to provide stable income as well as track close to the performance of the SP500 index. A higher expense ratio of .35% is offset by the income potential from a strong 7.66% trailing 12 month dividend yield. This income ETF has returned an impressive 16.54% YTD. JEPI is a newer ETF built on older income techniques applied to Exchange Traded Notes. Looking for more income plays, check out this post.
Vanguard SP500 ETF (VOO)
VOO offers portfolio diversity into the SP500 index at a low expense ratio of .03%. This is much lower than $SPY’s .095% expense ratio for an identical product. Exposure to the top 500 largest US companies in one easy fund. An easy choice for growth investors looking to diversify. As of 2021, it has a decent dividend yield of 1.94% for a fund that doesn’t focus on dividends.
Conclusion:
ETFs are a great addition to any portfolio. They are especially helpful for new investors who aren’t confident picking individual companies. I’ve used them personally to spend less time analyzing stocks and more time with family. ETFs currently make up 70% of my portfolio and I plan to keep it that way. There are 1000s of ETFs on the market and you can easily find one that fits your goals.