2011 Passive Income ETF’s

By: ispeculatornew
Date posted: 01.06.2011 (5:00 am) | Write a Comment  (2 Comments)

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It’s nothing new to say how much we are fans of passive income and the lifestyle that comes with it. There are many different ways to do so but one of them remains having a portfolio that pays steady and growing dividends. There are many different ways to get it done but one of them that we have discussed is buying a diversified ETF portfolio. It is not the best solution for everyone but if you want to have a very diversified passive income portfolio and do not have the time to research individual stocks, ETF’s can be a great way to do get it done.

I would personally think of two main category of ETF’s that could attract interest for such a portfolio; fixed income ETF’s and dividend ETF’s. The dividend ETF’s are an obvious one and there is increasing choice to choose from.

These ETF’s usually have fairly strict criteria and they make it possible to purchase a large number of ETF stocks without paying high fees. As many of you know, dividend growth is as important as any other criteria when selecting dividend stocks. For that reason, my number one pick would be VIG, a Vanguard ETF that invests in companies that are shown to increase their dividends.

It is not a big surprise to see some of their most important holdings which have been discussed in this blog in the past:

3-Exxon Mobile
5-Pepsi-Cola (part of my 2011 stock picks)

Here are the top 10 Dividend ETF’s by market cap:

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The other category is fixed income ETF’s. They represent one of the greatest benefits of ETF’s. Just a few years ago, buying bonds was a very expensive proposition for investors because of the fact that they are so illiquid. Thanks to ETF’s, investors have been able to easily get exposure to the bond market. However, I am not very optimistic about the prospects of bonds, especially corporate bonds right now. Because of that, my personal bet would be a broader choice, BND, which represents the total bond market.

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What are your top picks?

Disclosure: No positions on these ETF’s

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  1. […] discussed many times how much I appreciate the arrival of bond ETF’s because it helps retail investors such as myself have a fair shot at trading bonds. It’s […]

  2. Comment by Zzay — October 7, 2011 @ 5:02 am

    Where did you get your data?
    ProShares UltraShort 20+ Year Treasury (TBT) has a YTD return of -31,9%!! also PowerShares International Dividend Achievers Portfolio (PID) has a YTD return of 0,34% not 13!

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