ETF Dividend Investing Strategy (BEST Dividend ETFs!)
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 Published On Oct 20, 2020

I searched through thousands of ETFs to find the best candidates for an ETF dividend investing strategy. In this video, I'll tell you the best dividend ETFs and how to repeat my process for your own investing strategy!

00:00 - Intro
1:07 - My Hunt for Dividend Yield
2:11 - Screening Dividend ETFs
5:20 - Screening Dividend ETFs for Growth (VERY Important!)
8:10 - 4 Great Dividend ETFs
10:27 - 2 Best Dividend ETFs
10:42 - SPHD High Dividend Low Volatility ETF
12:09 - SPYD High Dividend ETF
12:51 - SPHD vs. SPYD (Which is Best?)

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As an aspiring dividend investor, the hunt for yield is always a focus of mine when selecting stocks. The problem is, the higher yield I look for, the more concentrated and risky my portfolio becomes. As a strong believer of index fund investing, I thought it was about time to dive into the universe of dividend ETFs and solidify my #DividendInvesting once and for all.

But, there are thousands of ETFs out there! Luckily, ETFDB.com has a phenomenal ETF screener that helped me narrow down my options. I used a variety of different screening options, which included:
• Dividend yield greater than 4.75% (leaving me with a 4% yield after taxes)
• U.S. equities only (ensuring a capital gains tax rate instead of anything harsher)
• Diversification (the whole reason for doing this!)
• Minimum 30 holdings (to minimize risk and volatility)
• Fees of .5% or less (expense add up significantly - I want them as low as possible)
• Passively managed only (active managers fail 9 times out of 10, and they charge more)

With these qualities, I narrowed 2,000+ ETFs down to just 17. But the screener didn't catch everything. So, I immediately ruled out some of these that were specialized in specific market sectors (energy, for example) as well as some that were actually international ETFs and would've cost me more in taxes.

This whittled my list down to 7 ETFs. Much more manageable! But, it's time to get pickier. As a young investor, capital growth is just as important to me as dividend yield. So, I want to make sure any dividend ETF I invest in has the opportunity for capital appreciation - and that's where a lot of #DividendStocks and #DividendETFs fail. Since these ETFs are all passively managed, the important thing to look at is the methodology behind the ETFs. I want to see that these funds have been able to mimic the returns of the market in the past (which are historically positive).

This ruled out 3 more of the remaining ETFs, leaving just 4 - FDL, RDIV, SPHD and SPYD. I got pickier with the expense ratios, yields and underlying assets to rule out both FDL and RDIV. Don't get me wrong, they're still great options - but I think SPHD and SPYD are just superior options.

So this leaves me with 2 dividend ETFs that are pretty dang good. I like their methodology, their yield, their costs and their opportunity for capital appreciation. But it would be irresponsible to get this far and invest in them without any further research.

So, I took a very close look at the methodologies behind both SPYD and SPHD to figure out which of these ETFs earned the title of the single best dividend ETF. It wasn't an easy decision to make - and the answer might actually differ depending on your investing style and personal goals.

In the end, both SPYD and SPHD are great options for dividend investors. I'll personally continue investing in both of these ETFs to balance out the pros and cons of each, collecting dividends all the while.

How are you executing your dividend investing strategy? Are you using one of these dividend ETFs, or another dividend ETF that I didn't mention? Let me know in the comments!

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DISCLAIMER: NOT FINANCIAL ADVICE.
The content in this video should not be used as the basis for any investment decision, as it is for entertainment purposes only. Additionally, some of the links contained in this description are affiliate links. I may earn a commission via Amazon, M1 Finance or Robinhood should you choose to purchase or sign up at the links provided.

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