Latest news with #Schwab
Yahoo
14 hours ago
- Business
- Yahoo
3 Top Dividend ETFs to Buy in June for a Lifetime of Passive Income
The Schwab U.S. Dividend Equity ETF holds 100 high-quality, high-yielding dividend stocks. The Vanguard Utilities ETF invests in utilities, which tend to pay high-yielding and steadily rising dividends. The Vanguard Real Estate ETF holds REITs, many of which have excellent records of increasing their high-yielding payouts. 10 stocks we like better than Vanguard Utilities ETF › Investing in exchange-traded funds (ETFs) makes it super easy to collect passive income. Many funds have income-focused strategies, which enable investors to sit back and watch the income flow into their accounts. The Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD), Vanguard Utilities ETF (NYSEMKT: VPU), and Vanguard Real Estate ETF (NYSEMKT: VNQ) are three of the top dividend ETFs. Each fund should be able to deliver reliable passive income in the decades ahead, making them great ETFs to buy this June to collect income for the rest of your life. The Schwab U.S. Dividend Equity ETF tracks an index (Dow Jones U.S. Dividend 100 Index) that focuses on companies that pay quality, sustainable high-yield dividends. It screens companies based on several dividend quality factors, including yield and five-year dividend growth rate. The fund's focus on higher-yielding stocks provides investors with a higher current income stream. Over the trailing 12 months, the fund has an income yield of around 4%. That's about 3 times higher than the S&P 500's dividend yield (which is around 1.3%). The ETF also aims to hold stocks with solid records of increasing their dividends, which should continue. As a result, the fund has steadily paid out higher distributions to its investors over the years. The fund's current holdings have increased their dividends by more than 8% annually over the past five years. Its balanced blend of yield and growth positions this fund to provide investors with lots of passive income in the decades ahead. The Vanguard Utilities ETF holds companies that operate in the utilities sector. These companies distribute electricity, water, or gas to customers under government-regulated rate structures or long-term contracts. Because of that, they generate stable and growing cash flow. That supports their ability to pay above-average and steadily rising dividends. This ETF currently holds 68 utilities. These companies stand to benefit from the expected surge in power demand over the coming decades. According to some forecasters, catalysts like AI data centers, the onshoring of manufacturing, and the electrification of everything could boost U.S. power demand by 55% by 2040. That should drive up power prices and fuel growth opportunities for utilities to build more power plants and electricity transmission lines. Those growth drivers should give these companies plenty of power to continue increasing their higher-yielding dividends, which should enable the fund to steadily pay higher distributions to its investors. It currently has a 2.9% yield. The Vanguard Real Estate ETF invests in real estate investment trusts (REITs). These entities invest in commercial real estate, such as office buildings, warehouses, and apartments. Those properties produce rental income, the bulk of which REITs must distribute to investors to remain in compliance with IRS regulations. (They don't pay income taxes at the corporate level if they distribute at least 90% of their taxable net income to shareholders.) As a result, REITs tend to pay high-yielding dividends (the ETF currently has a 3.6% income yield). The fund currently holds 158 real estate stocks. Many of these companies have a long history of growing their dividends. Two factors drive dividend growth in the REIT sector: rising rental rates and investments to grow their portfolios. Many long-term leases feature rental escalation clauses, while other property types have shorter-term leases that enable landlords to sign new leases at higher market rates as they expire. Meanwhile, many REITs invest capital to expand their portfolios by developing new properties, completing redevelopment projects, and acquiring properties, portfolios, or other REITs. These drivers increase their rental income, enabling them to grow their dividends. That positions this ETF to steadily distribute more cash to its investors. The Schwab U.S. Dividend Equity ETF, Vanguard Utilities ETF, and Vanguard Real Estate ETF hold companies that tend to pay higher-yielding dividends. Further, many of these companies aim to steadily increase their payouts. Because of that, they are great ETFs to buy this June to set yourself up to potentially collect a lifetime of passive income. Before you buy stock in Vanguard Utilities ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard Utilities ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Matt DiLallo has positions in Schwab U.S. Dividend Equity ETF. The Motley Fool has positions in and recommends Vanguard Real Estate ETF. The Motley Fool has a disclosure policy. 3 Top Dividend ETFs to Buy in June for a Lifetime of Passive Income was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
17 hours ago
- Business
- Yahoo
One of the most attractive — and sometimes secretive — ways the wealthy donate money could soon get even more popular
A provision in Trump's tax bill could make donor-advised funds an even more popular form of giving. DAFs are especially attractive to the ultrawealthy because of big tax advantages. Some experts told BI they're seeing DAF donations among the wealthy change in the post-Trump era. As President Donald Trump's "big beautiful bill" moves through Congress, a provision hiking taxes on private foundations could make another form of philanthropy even more attractive: donor-advised funds. Donor-advised funds, or DAFs, are accounts where donors can contribute funds, immediately get a tax deduction, and "advise" on where to donate — and they are becoming increasingly popular. As Daniel Heist, a professor at Brigham Young University and a lead researcher on the 2025 National Survey of DAF Donors, put it, "they're growing like crazy." Donors can contribute non-cash assets, like appreciated securities or crypto, to DAFs, and the funds grow over time. BI spoke with academics, DAF sponsors, and nonprofits about why major donors use DAFs, how the tax bill and Trump are changing the calculus, and the risks of the "opaque" form of philanthropy. Sponsoring organizations, which are themselves public charities, operate DAFs. Some of the largest are connected to investment firms like Fidelity, Vanguard, and Schwab, though others include community foundations or religious organizations. Technically, donors don't control the funds in their DAF, but practically speaking, they can direct the money to any accredited charity. "As long as you're following the rules of the DAF provider, you should always have those recommendations honored," Mitch Stein, the head of strategy at Chariot, a technology company focused on DAFs, said. Private foundations have to distribute at least 5% of their assets annually for charitable purposes, but DAFs don't have payout requirements. Donors also don't report their gifts to individual organizations on their taxes, and instead report that they gave to the DAF. If Trump's fiscal agenda passes in the Senate (it has already passed in the House of Representatives), it would raise the current 1.39% tax on private foundations' investment incomes. The rate would rise to 10% on foundations worth $5 billion or more, to 5% for those worth between $250 and $5 billion, and to 2.8% for those worth between $50 million and $250 million. It wouldn't change for foundations worth less than $50 million. "There already was a substantial amount of momentum toward donor-advised funds, and a bill like this would only magnify that," Brian Mittendorf, a professor at Ohio State University who has studied DAFs, told BI. Though people across net worths use DAFs — Heist called them a common "mid-range philanthropic tool" — they're particularly attractive to the rich. The 2025 survey of DAF donors found that of 2,100 respondents, who were surveyed between July to September 2024, 96% had a net worth of more than $1 million. "I definitely see a trend away from private foundations," Heist said. Rebecca Moffett, the president of Vanguard Charitable, a prominent DAF provider, said she's seeing the same pattern. The main draw has to do with taxes, according to data and the experts. In the 2025 survey, 62% of donors said tax advantages were a strong motivation for opening a DAF account. Jeffrey Correa, Senior Director of US philanthropy at the International Rescue Committee, told BI that there's been an "explosion" of major donors giving through DAFs. The ability to contribute non-cash assets is also a big factor. Donating appreciated assets lets the donor avoid paying capital gains taxes (in the 2025 survey, 51% of respondents said reducing capital gains taxes was a big consideration). Convenience is another benefit, experts said, since DAFs are more streamlined and cheap than private foundations. Then there's the question of privacy, beyond how DAF donations show up on tax filings. Donors can choose varying levels of anonymity when donating to recipient nonprofits. Only 4% of donors in the 2025 survey opted to be totally anonymous to the recipient organizations, most commonly to avoid public recognition or solicitation. Just 24% said they wanted to avoid scrutiny. Generally, the experts BI spoke with said they don't see confidentiality as the primary appeal of DAFs. Moffett and Correa said they haven't seen more major donors opt for anonymity or express concerns about confidentiality. Most of those BI spoke to were enthusiastic about DAFs, but some flagged risks. Mittendorf and Helen Flannery, an associate fellow at the Institute for Policy Studies, found through a study that DAFs distribute grants to politically engaged organizations 1.7 times more than other funders. "They can be great conduits for dark money because they're completely opaque," Flannery said, adding that the public doesn't always know where donors' DAF funds go. Risks aside, the wealthy seem as interested as ever in using DAFs — and in turn slowly eroding the private foundations that once defined the philanthropic world. Have a tip or something to share about your giving? Contact this reporter via email at atecotzky@ or Signal at alicetecotzky.05. Use a personal email address and a nonwork device; here's our guide to sharing information securely. Read the original article on Business Insider Sign in to access your portfolio
Forbes
2 days ago
- Business
- Forbes
Is Your Broker Gouging You? Use This Guide To The Best Buys In Money Markets
Brokerage firms are short-changing customers with their money-market funds, says one angry commentator. Gosh. These brokers deliver a lot of terrific service for free (custody, trading, research). How are they supposed to pay for it all? Instead of grousing, do this: Accept the fact that the brokerage has to cover its costs, but arrange your affairs so that some other customer picks them up. This survey shows you how to side-step expensive money funds. The path to low-cost portfolio management has two elements. First is to set up your finances so that the cash in your transaction accounts, where you can't avoid high management fees, is kept to a minimum. The second is to shuttle excess cash in and out of some other safe, liquid investment, one with a low management fee. The transaction accounts, for paying bills, receiving direct deposits and settling securities trades, might have $10,000 most of the time and more than that only when there's a need. The low-fee account might have $100,000 most of the time. If you do business at Vanguard, that low-fee account could be a Vanguard mutual fund. Anywhere else, you have to be creative, because the money market fund on offer is going to be expensive. Instead of using a Schwab or Fidelity money fund for the $100,000, buy shares in an exchange-traded fund that behaves like a money fund but has a much lower expense ratio. You have to keep an eye on the balance in the transaction account. When it needs feeding, sell some of the ETF shares (or Vanguard fund shares) a day ahead. When the trade settles the following day, move cash into the transaction account. At some institutions you'll be juggling three pots of money: a brokerage account where you hold the ETFs and other shares; a 'settlement fund' that handles proceeds of stock sales and payments for shares bought, and a 'cash management' account that does your everyday banking. It's a shame that you have to juggle at all, but the brokers evidently hope that you won't have the patience for the transfers and so will leave idle cash in places where they can help themselves to a chunk of the interest. If you are inattentive, you will have too much in a settlement account with a disappointing yield or too much in a cash management account with a terrible yield. Not even Vanguard is above such mischief. It sells low-cost money funds, but the one you want most if you live in a high-tax state, Vanguard Treasury Money Market, cannot be used as your settlement fund for securities trades. (Why is it in Vanguard's interest to force you to pay state income tax? I'm waiting for an answer from the company.) Vanguard's cash management account has a 3.65% yield, which, at a time when Treasury bills yield 4.35%, is equivalent to a money market fund with a very stiff management fee. Let's assume you have wised up to moving cash into the brokerage account and want to deploy it. Where are the best deals? Here's what Vanguard has to offer in low-cost money-market mutual funds: For most Vanguard investors, the Treasury fund is the best choice, although the three funds with municipal paper might be useful to taxpayers in the highest federal bracket. Muni funds, it should be noted, have very volatile yields. A month ago they were paying a percentage point more. Everyone not banking at Vanguard needs to use an ETF to hold large cash balances. Here are the best ones: You can get in and out of a Vanguard mutual fund with no sales fee. In an ETF you're going to get hit with a bid/ask spread of a penny or two a share. Except over a short holding period, the trading cost is likely to be less consequential than the management fee. ETFs are a tiny bit riskier than money funds, since shifts in the yield curve can move their prices. This is a fair bet for you: Rate changes are as likely to make you a few extra cents a share as to lose you money. If the risk bothers you, sort the table on the duration column and select a very short-term portfolio. Now that you have optimized the yield from cash, ponder this question: Do you maybe have too much of it? I see three fallacies that lead savers to make this mistake. Fallacy #1: The bucket strategy. This one, oh so popular with financial planners, goes like this: Once you are retired, you need to have two years of spending in a cash bucket. That way, they tell you, you will not be forced to sell stocks at an inopportune time. To which I respond: Great. Now tell me when the opportune times to sell stocks will occur. Fallacy #2: The rainy-day kitty. This is the advice given to younger people. Put six months of spending into a bank account to cover emergencies. You could get laid off. I agree that a reserve fund, ideally outside your 401(k), is a great idea. But it doesn't have to be in cash equivalents. It could be invested in stocks and bonds. Their liquidity is high. You get next-day settlement. Instead of six months of spending in a CD, set aside 12 months of spending in ETFs. That gives you more protection and a better shot at living well later. Fallacy #3: The dry-powder notion. Instead of putting 100% of your stock money in stocks, you invest 80%, leaving money to deploy after a crash. This might work for Warren Buffett, who's sitting on a lot of cash at Berkshire Hathaway. But how confident are you that you can identify a market low? Did you buy stock in March 2009, during the financial crisis? Did you buy in March 2020, in the pandemic? If you didn't, maybe it's time to give up on the idea you can time the market. MORE FROM FORBES
Yahoo
3 days ago
- Business
- Yahoo
Why I Can't Stop Buying This 4%-Yielding Dividend ETF for Passive Income
The Schwab U.S. Dividend Equity ETF currently has a 4% yield. The fund owns 100 high-quality, high-yield dividend stocks with excellent records of increasing their payouts. It should supply me with a lucrative and growing passive income stream and price appreciation potential. 10 stocks we like better than Schwab U.S. Dividend Equity ETF › I love to collect passive income. I don't have to work for it, and it provides me with additional money to invest. Eventually, this strategy will allow me to retire and live off my passive income. I invest in a variety of income-generating investments. One that I can't stop buying these days is the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD). This exchange-traded fund (ETF) currently has a 4% dividend yield, which is about triple the S&P 500's dividend yield of around 1.3%. That enables me to generate more passive income from every dollar I invest. The fund also has an excellent record of increasing its payments. Because of that, it should provide me with lots of passive income in the future, which is why I just can't stop adding to my position. The Schwab U.S. Dividend Equity ETF has a very simple strategy. The ETF aims to track the total return of the Dow Jones U.S. Dividend 100 Index. That underlying index screens stocks based on four dividend quality attributes: Cash flow to total debt Return on equity (ROE) Dividend yield Five-year dividend growth rate The index uses these metrics to select the 100 best stocks based on their ability to pay sustainable, high-yielding dividends that should grow at above-average rates. It runs this screen once a year to reconstitute its holdings. It will remove lower-quality dividend stocks and replace them with companies offering higher-quality payouts. At its last annual refresh in March, the 100 holdings had an average dividend yield of 3.8% and had grown their payouts at an average annual rate of 8.4% over the past five years. That provides investors with a nice blend of current income and growth potential. Among the notable additions was oil giant ConocoPhillips (NYSE: COP). It currently ranks as the sixth-largest holding of the Schwab U.S. Dividend Equity ETF. The oil company has a 3.7% dividend yield. It has been growing its payout at a robust rate in recent years (34% in 2024, 14% in 2023, and 11% in 2022). ConocoPhillips aims to deliver dividend growth within the top 25% of companies in the S&P 500 in the future. It should have plenty of fuel to achieve that above-average growth rate. The oil company expects its investments in LNG and Alaska to drive $6 billion in incremental free cash flow over the next few years, putting it on track to deliver sector-leading growth through 2029. The Schwab U.S. Dividend Equity ETF's focus on dividend growth has paid off for its investors. While dividend payments fluctuate from quarter to quarter, they've steadily risen over the years: As a result, fund investors collect a lucrative and steadily rising income stream. That has helped contribute to its strong total returns (dividend income plus stock price appreciation) over the longer term: Fund 1-Year Return 3-Year Return 5-Year Return 10-Year Return Since Inception (10/20/2011) Schwab U.S. Dividend Equity ETF 6.75% 4.91% 16.29% 10.55% 12.10% Data source: Schwab. The fund's long-term performance aligns with the historical returns of dividend growth stocks. Over the last 50 years, dividend growers have delivered an average annual return of 10.2%, according to data from Ned Davis Research and Hartford Funds. They have significantly outperformed companies with no change in their dividend policy (6.8%), non-payers (4.3%), and cutters and eliminators (-0.9%). While that past performance doesn't guarantee the future of dividend stocks or that the fund will produce strong returns in the future, it does bode well for investors. I'm working hard to grow my passive income and net worth to have a comfortable retirement. The Schwab U.S. Dividend Equity ETF aligns perfectly with those goals. It will provide me with an attractive and rising passive income stream and healthy price appreciation potential. That's why I just can't stop buying this top-notch dividend ETF. I'll likely continue adding to my position each month as I march toward my passive income target. Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Schwab U.S. Dividend Equity ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,761!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $826,263!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 170% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Matt DiLallo has positions in ConocoPhillips and Schwab U.S. Dividend Equity ETF. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Why I Can't Stop Buying This 4%-Yielding Dividend ETF for Passive Income was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- General
- Yahoo
Are Titans putting Cam Ward through a 'stupid' charade or necessary football tradition?
(This article was written with the assistance of Castmagic, an AI tool, and reviewed by our editorial team to ensure accuracy. Please reach out to us if you notice any mistakes.) Based on the conversation in an "Inside Coverage" podcast episode, Yahoo Sports' Charles Robinson and Frank Schwab have mixed views about how the Tennessee Titans are handling rookie quarterback Cam Ward. Schwab is baffled by the Titans' approach to splitting reps between Ward and Will Levis. 'Why? What's the point in all this? ... We all know Cam Ward's starting Week 1," Schwab said. "I find this stupid.' Schwab suggests the Titans are playing games and should focus on getting their No. 1 overall draft pick ready to be the starter. His main argument: It's pointless and disingenuous for head coach Brian Callahan to be splitting first-team reps or framing the starting QB job as something Ward has to "earn," especially since everyone knows Ward is the starter from Day 1 unless he gets hurt or something very unexpected happens. These types of mind games are 'stupid," so why are the Titans even bothering with this charade? This is reminiscent of the Urban Meyer/Trevor Lawrence situation in Jacksonville, a QB competition that wasn't real. Does anyone — inside or outside the Titans — really believe there's a QB battle happening? The pretense in Nashville is unnecessary. Robinson disagrees and feels there's real value in letting Ward 'earn' the starting job, even if the competition isn't entirely authentic. He compares it to his own (albeit high school) experience of being announced as a starter and how meaningful that was for his growth and confidence. It's beneficial for a young player to have a sense of accomplishment and momentum by going out and winning the job in camp, even if it's a bit of theater. He argues that being 'given' the starting job outright, simply because of draft status, takes away that motivational aspect. Some level of competition is a longstanding football tradition and a useful bit of preseason theater. There's recent NFL history to back up the approach. Robinson references head coach Sean Payton running a similar 'open competition' with Bo Nix and Jarrett Stidham in Denver, which everyone knew wasn't true, but he insists there's still some intangible value to being publicly anointed as the starter at the end of a process, even if the process is a bit of a facade. The 'theater' is part and parcel of football culture. Even a staged competition can help a young QB's mentality and buy-in, allowing Ward to feel like he's achieved something, which has value for the player and locker room. To hear more NFL discussions, tune into Inside Coverage on Apple, Spotify or YouTube.
