Latest news with #VanguardDividendAppreciationETF
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a day ago
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1 Brilliant Vanguard ETF to Invest $1,000 Into This June
Dividend growth stocks have historically produced the highest total returns with the lowest volatility. The Vanguard Dividend Appreciation ETF tracks an index that screens for the top dividend growth stocks. The fund has produced strong returns for investors, which could continue in the future. 10 stocks we like better than Vanguard Dividend Appreciation ETF › Vanguard has made it easy for anyone to be a passive investor. It has several passively managed exchange-traded funds (ETFs) designed to track a specific stock market index. That enables investors to buy funds with strategies that align with their objectives. Investing in dividend growth stocks is one of the smartest strategies because they've historically produced the highest total returns with the lowest volatility. That makes the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG), which tracks the performance of the S&P U.S. Dividend Growers Index, a brilliant ETF to buy. It could significantly grow the value of a $1,000 investment made this June. Most investors don't fully appreciate the power of dividend payments. Since 1940, dividend income has contributed 34% of the S&P 500's total return on average, according to data by Morningstar and Hartford Funds. Further, Hartford Funds and Ned Davis Research have found that since 1973, the average dividend payer in the S&P 500 has delivered a 9.2% average annual total return, more than double the return of non-dividend payers (4.3%). Dividend payers also had much lower volatility than non-dividend payers. In digging deeper into the data on dividends, Hartford Funds and Ned Davis Research uncovered that the best returns and lowest volatility came from dividend growers and initiators. They delivered an average total return of 10.2% compared to 6.8% for companies with no change in their dividend policy and a negative 0.9% average return for dividend cutters and eliminators. Given that data, investing in dividend growth stocks is a brilliant strategy. However, that's easier said than done for the average investor who doesn't have the time to actively manage a portfolio of dividend stocks. That's where Vanguard can help. The Vanguard Dividend Appreciation ETF tracks an index that screens companies for those with a consistent record of increasing their dividends for at least the past decade. It excludes the top 25% highest-yielding dividend stocks from the list because these companies tend to be at higher risk of being unable to grow their dividends (or worse, cut or eliminate their payouts), which has historically yielded lower investment returns. There are currently 338 stocks on the list. The Vanguard Dividend Appreciation ETF isn't a typical dividend ETF. Many of those funds focus on holding higher-yielding dividend stocks and cater more to income-focused investors. This fund aims to benefit from the value growth that dividend growth stocks have historically delivered. That's why its dividend yield (recently around 1.7%) is lower than many other top dividend ETFs. However, what this ETF lacks in yield, it more than makes up for in total return. Over the past 10 years, the fund has delivered an 11.5% average annual return. At that rate, it would have grown a $1,000 investment made a decade ago into nearly $3,000. That's a great return for a lower-risk investment strategy. While the fund's past performance doesn't guarantee it will produce similar returns in the future, its focus on dividend growers puts it in a strong position to meaningfully increase the value of an investment over the long term. For example, if it can deliver a 10% annual return, it could grow a $1,000 investment into nearly $17,500 in 30 years. Meanwhile, if it maintained its rate of return over the past decade (11.5%), it could grow $1,000 into over $26,000 in 30 years. The more you invest in the fund, the more money you can potentially make in the future. Adding $1,000 to your investment in this ETF each year could grow the total value to nearly a quarter of a million dollars in 30 years at an 11.5% annual rate of return. Dividend growth stocks have historically been powerful investments for those seeking to grow their wealth over time. They produce strong returns with less volatility than non-dividend payers and other dividend stocks. Because of that, the Vanguard Dividend Appreciation ETF looks like a brilliant ETF to invest $1,000 into this June. It could grow that money into a much larger future windfall. Before you buy stock in Vanguard Dividend Appreciation ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard Dividend Appreciation 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 $674,395!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $858,011!* Now, it's worth noting Stock Advisor's total average return is 997% — a market-crushing outperformance compared to 172% 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 June 2, 2025 Matt DiLallo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Dividend Appreciation ETF. The Motley Fool has a disclosure policy. 1 Brilliant Vanguard ETF to Invest $1,000 Into This June was originally published by The Motley Fool
Yahoo
3 days ago
- Business
- Yahoo
This Unstoppable Dividend ETF Could Earn You $5,000 a Year in Passive Income
Dividend ETFs are collections of stocks that pay out a small amount in dividends each month or quarter. The more shares you own of a dividend ETF, the more you'll earn in passive income. By investing consistently over years, you could generate thousands of dollars in dividend payments. 10 stocks we like better than Vanguard Dividend Appreciation ETF › Investing in dividend stocks can be a fantastic way to generate passive income through the stock market, and a dividend ETF can make the process even more hands-off. A dividend ETF is a collection of dividend stocks grouped into a single investment, and this type of investment can take much of the guesswork out of where to buy. Rather than having to research dozens of individual stocks, you can build a well-diversified portfolio with just one or two ETFs. It takes time and consistency to generate a substantial amount of passive income with dividend stocks, but it's possible to create a $5,000-per-year income stream with minimal effort. Here's how. Whether you're just getting started with dividend stocks or you're looking to add a solid ETF to your portfolio, the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) can be a smart choice. One major advantage of this fund is its diversification. It contains 338 large-cap stocks that are fairly evenly allocated across 10 industries. It's most heavily weighted toward tech, with around 23% of the fund made up of tech stocks. By comparison, the Vanguard S&P 500 ETF (which tracks the S&P 500 itself), devotes around 30% of the fund to the tech industry. Greater diversification and less reliance on tech stocks can help limit your risk, especially during periods of volatility. Because this fund is relatively evenly spread across many industries, your investment won't be hit as hard if one or two sectors take a turn for the worse. The biggest perk of investing in dividend stocks is the passive income you'll receive in addition to your investment earnings. You'll earn a small amount in dividends per share, so the more shares you own, the more you'll receive in passive income. The Vanguard Dividend Appreciation ETF most recently paid a dividend of around $0.94 per share per quarter, which would add up to $3.76 per year. That may not sound like much, but again, that's the dividend per share. The more you own, the more you'll earn. To see how many shares it would take to reach $5,000 per year in dividends, we'll need to divide $5,000 by $3.76 for a result of around 1,330 shares. With this ETF currently priced at just under $200 per share, 1,330 shares would add up to an initial investment of around $266,000. Investing that much cash at once is wildly out of reach for the average investor, but there's good news: You can also invest smaller amounts over time. For example, say that you can afford to buy three shares per month, or 36 per year. At that rate, it would take around 37 years to accumulate 1,330 shares in total. Keep in mind, though, that these calculations assume the dividend payment remains the same over those 37 years. This ETF has a long history of increasing its dividend year over year, which means it may not take quite that long to accumulate $5,000 in annual dividend payments. Remember, too, that any dividends you receive are in addition to whatever you're earning in investment gains. Over the past 10 years, this ETF has earned an average rate of return of 11.5% per year. At that rate, if you were buying three shares per month for a total of $600 per month, you could accumulate around $3.5 million after 37 years -- on top of the $5,000 per year in passive income you'd be receiving from dividends. You also don't need to spend $600 per month or invest for 37 years to see substantial gains. Even a small fraction of those contributions could still add up to hundreds of thousands of dollars, in addition to the quarterly dividend payments. Investing in a dividend ETF is a fantastic way to build wealth while also generating passive income, and the Vanguard Dividend Appreciation ETF can supercharge your earnings while minimizing risk. The sooner you get started investing, the more you can potentially earn over time. Before you buy stock in Vanguard Dividend Appreciation ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard Dividend Appreciation 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 $656,825!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $865,550!* Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% 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 June 2, 2025 Katie Brockman has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Vanguard Dividend Appreciation ETF and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy. This Unstoppable Dividend ETF Could Earn You $5,000 a Year in 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
- Business
- Yahoo
Better Dividend ETF to Buy Now: Schwab U.S. Dividend Equity ETF or Vanguard Dividend Appreciation ETF?
The Schwab U.S. Dividend Equity ETF has a higher yield and has sharply increased its dividend. However, the Vanguard Dividend Appreciation ETF has produced better total returns for investors. A seeming shift in one ETF's DNA provides clues as to which one may perform better in the years ahead. 10 stocks we like better than Vanguard Dividend Appreciation ETF › Diversification is crucial for dividend investors. You don't want to depend on only a few companies for your dividend income, because it can be painful if something goes wrong. That's where exchange-traded funds (ETFs) can make life much easier. The Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) and Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) are two popular dividend stock ETFs. Both offer investment exposure to a bucket of blue chip dividend stocks and have gradually paid investors increasingly larger dividends. But which of these ETFs should investors buy right now? This Fool dove deep, and what I found is fascinating. Here is what you need to know. The Vanguard Dividend Appreciation ETF tracks the S&P U.S. Dividend Growers Index, while the Schwab U.S. Dividend Equity ETF follows the Dow Jones U.S. Dividend 100™ Index. Both ETFs deal primarily in large-cap dividend stocks, and the individual companies in these ETFs and their respective weightings change over time. So, to compare these two funds, I looked at which ETF has grown its dividend more over the past 10 years. You would probably guess it was the Vanguard Dividend Appreciation ETF given its name and its focus on dividend growth. What's more, its 1.8% yield is roughly half that of its rival's 4% yield, and generally speaking, faster-growing dividend stocks yield less. Surprisingly, investors have gotten better dividend growth from the Schwab U.S. Dividend Equity ETF. It's hard to keep raising a dividend without sufficient underlying business growth, so given the Schwab ETF's robust dividend growth, you'd probably expect it to have better total investment returns over the past decade. Guess again! The Vanguard Dividend Appreciation ETF is the winner in price appreciation and total returns. It's a bit confusing why this is until you dig deeper. What's going on? Here are the current top holdings for each ETF, along with their recent dividend yields: Company Percentage of ETF Dividend Yield Broadcom 4.20% 1% Microsoft 4.12% 0.7% Apple 3.77% 0.5% Eli Lilly 3.72% 0.8% JPMorgan Chase 3.62% 1.9% Visa 2.98% 0.6% ExxonMobil 2.44% 3.8% Mastercard 2.36% 0.6% Costco Wholesale 2.31% 0.5% Walmart 2.22% 0.9% Source: Chart by author using data from the ETF's prospectus page. Company Percentage of ETF Dividend Yield Coca-Cola 4.34% 2.7% Verizon Communications 4.31% 6.2% Altria Group 4.25% 6.7% Cisco Systems 4.24% 2.5% Lockheed Martin 4.20% 2.7% ConocoPhillips 4.14% 3.6% Home Depot 4.05% 2.5% Texas Instruments 3.94% 3% Chevron 3.84% 4.9% AbbVie 3.69% 3.5% Source: The author created this chart using data from the ETF's prospectus page. A decade ago, the Vanguard Dividend Appreciation ETF yielded approximately 2.1%. Now, it's 1.8%, which makes sense when you look at its top holdings. Outside of ExxonMobil, these companies have strong earnings growth and low dividend yields. Investors generally pay more for growth, which is why the yields would be lower. The Schwab ETF's yield increased from 2.7% to 4% over 10 years. As shown in the second list, nearly every top holding yields 2.7% or higher today. These stocks mostly feature lower growth and higher dividend yields. Over time, the Schwab U.S. Dividend Equity ETF seems to have shifted to slower-growing, higher-yielding dividend stocks. This helps explain how an ETF's yield and dividend amount could increase, as Schwab's did, without the accompanying growth and price appreciation. Understanding this divergence in the two ETFs should help you determine the better investment for your portfolio. If maximizing your immediate income is your primary goal, it's hard to go wrong with the Schwab U.S. Dividend Equity ETF and its 4% yield. You'll still get a little bit of price appreciation, too. However, I wouldn't anticipate another decade of such strong dividend growth. The ETF's holdings seem to have a lower growth baseline now. The Vanguard Dividend Appreciation ETF's current composition is clearly more growth-oriented. Therefore, investors should expect it to grow the dividend faster and generate better total returns over the long term. So, for most investors who aren't retirees, the Vanguard Dividend Appreciation ETF is the better buy today. Before you buy stock in Vanguard Dividend Appreciation ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard Dividend Appreciation 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 $657,385!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $842,015!* Now, it's worth noting Stock Advisor's total average return is 987% — 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 June 2, 2025 JPMorgan Chase is an advertising partner of Motley Fool Money. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Apple, Chevron, Cisco Systems, Costco Wholesale, Home Depot, JPMorgan Chase, Mastercard, Microsoft, Texas Instruments, Vanguard Dividend Appreciation ETF, Visa, and Walmart. The Motley Fool recommends Broadcom, Lockheed Martin, and Verizon Communications and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Better Dividend ETF to Buy Now: Schwab U.S. Dividend Equity ETF or Vanguard Dividend Appreciation ETF? 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
30-05-2025
- Business
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Better Dividend Growth ETF: Vanguard Dividend Appreciation ETF or iShares Core Dividend Growth ETF
Dividend growth stocks have delivered the best returns over the last 50 years. Vanguard Dividend Appreciation ETF and iShares Core Dividend Growth ETF both track indexes focused on dividend growth stocks. There are subtle differences between these two dividend ETFs. 10 stocks we like better than Vanguard Dividend Appreciation ETF › Dividend growth stocks can be powerful investments. Hartford Funds and Ned Davis Research dug into the data on stocks based on their dividend policy. They found that over the past 50 years, dividend growers produced a higher total return with less volatility than companies that didn't increase their dividends regularly, those that cut or eliminated their payouts, and those that didn't pay dividends. The outperformance really added up over the long term. A hypothetical $100 invested in S&P 500 dividend growth stocks in 1973 would have grown to nearly $15,874 by the end of 2024. However, a similar $100 investment made in companies that didn't increase their dividend would have only grown to $2,983, while $100 in dividend non-payers would have only been worth $899. Meanwhile, a $100 investment in dividend cutters and eliminators would have lost money and been worth only $63 at the end of this time frame. Clearly, investing in dividend growth stocks can be a very powerful strategy. However, managing a portfolio of dividend growers is easier said than done. The good news is that many exchange-traded funds (ETFs) make investing in a strategy like dividend growth stocks easy. Two top options are the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) and iShares Core Dividend Growth ETF (NYSEMKT: DGRO). Here's a closer look at which dividend ETF is better for investors who want to benefit from the power of dividend growth stocks. The Vanguard Dividend Appreciation ETF and the iShares Core Dividend Growth ETF each track an index that measures the performance of dividend growth stocks. However, there are some subtle differences that investors should consider. The Vanguard Dividend Appreciation ETF tracks the S&P U.S. Dividend Growers Index, which aims to measure the performance of U.S. companies that have consistently increased their dividend every year for the past decade. It excludes the top 25% of the highest-yielding dividend companies from the list. Currently, 338 companies are in the index. Meanwhile, the iShares Core Dividend Growth ETF tracks the Morningstar U.S. Dividend Growth Index, which provides exposure to companies with at least a five-year history of uninterrupted dividend growth and the capacity to continue increasing their dividends. The index excludes REITs and the top 10% highest-yielding stocks. Currently, 408 stocks make the cut. The funds remove the highest-yield stocks to avoid yield traps that, for example, have a high yield because of a crashing stock price. The main goal of each index, and the ETFs that track them, is to hold the companies with the highest likelihood of increasing their dividends in the future. Here's a snapshot of their top holdings: Vanguard Dividend Appreciation ETF iShares Core Dividend Growth ETF Broadcom (4.2% of the fund) Microsoft (3.5%) Microsoft (4.1%) JPMorgan Chase (3.3%) Apple (3.8%) Broadcom (3.1%) Eli Lilly (3.7%) ExxonMobil (2.7%) JPMorgan Chase (3.6%) Johnson & Johnson (2.6%) Visa (3%) Apple (2.6%) ExxonMobil (2.4%) AbbVie (2.4%) Mastercard (2.4%) Procter & Gamble (2.2%) Costco (2.3%) CME Group (2.2%) Walmart (2.2%) Home Depot (2.1%) Data sources: Vanguard and BlackRock. Because the iShares Core Dividend Growth ETF only excludes the 10% highest-yielding dividend stocks instead of the top 25%, the fund has a higher dividend yield: 2.3% trailing-12-month yield compared to 1.8% from the Vanguard ETF. One of the many benefits of investing in ETFs is that they do all the work. In exchange, you pay the fund's manager a fee, known as the expense ratio. This cost can be well worth it for the ease ETFs provide in helping you achieve your investment strategy. Vanguard is a pioneer in offering low-cost index funds to investors. It's always working to save investors money. It recently did that for investors in its Dividend Appreciation ETF by lowering the expense ratio to 0.05%. That makes it even cheaper than the iShares Core Dividend Growth ETF, which has a 0.08% expense ratio. Put another way, for every $10,000 you invest in the Vanguard Dividend Appreciation ETF, you'd pay $5 in management fees each year. That compares to $8 for a similar investment in the iShares Core Dividend Growth ETF. While it might not seem like much, a few dollars in management fees each year can really add up over the decades. While the past doesn't guarantee the future, it's important to look back at a fund's performance to see how well its strategy has done in delivering returns for investors. Here's a look at the returns produced by these funds over the past decade: Fund 1-Year 3-Year 5-Year 10-Year Vanguard Dividend Appreciation ETF 11.14% 9.55% 13.05% 11.20% iShares Core Dividend Growth ETF 8.84% 7.58% 16.36% 11.56% Data source: Vanguard and BlackRock. As that table shows, the Vanguard Dividend Appreciation ETF has delivered a stronger performance in recent years. Meanwhile, the iShares Core Dividend Growth ETF has performed better over the longer term, though its 10-year return is only slightly higher than Vanguard's. The Vanguard Dividend Appreciation ETF and the iShares Core Dividend Growth ETF focus on dividend growth stocks, which have proven to be winning long-term investments. Either fund would be a solid option for investors seeking to add these powerful wealth creators to their portfolios. The iShares ETF is better for those seeking a bit more income now (due to its higher yield), while the Vanguard fund has a lower fee structure, which enables its investors to keep more of the returns generated by the fund. Before you buy stock in Vanguard Dividend Appreciation ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard Dividend Appreciation 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 $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor's total average return is 978% — 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 JPMorgan Chase is an advertising partner of Motley Fool Money. Matt DiLallo has positions in Apple, Broadcom, CME Group, Home Depot, JPMorgan Chase, Johnson & Johnson, Mastercard, and Visa and has the following options: short August 2025 $250 calls on Apple. The Motley Fool has positions in and recommends AbbVie, Apple, Costco Wholesale, Home Depot, JPMorgan Chase, Mastercard, Microsoft, Vanguard Dividend Appreciation ETF, Visa, and Walmart. The Motley Fool recommends Broadcom, CME Group, and Johnson & Johnson and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Better Dividend Growth ETF: Vanguard Dividend Appreciation ETF or iShares Core Dividend Growth ETF 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
23-05-2025
- Business
- Yahoo
Building a Passive Income Stream: 3 Top Dividend ETFs for Long-Term Returns
The Vanguard Dividend Appreciation ETF isn't the highest-paying income ETF, but there's a lot to like about it. The Vanguard International High Dividend Yield ETF has an excellent yield and cheap valuation. The Vanguard Real Estate ETF could be a big winner as interest rates fall. 10 stocks we like better than Vanguard Dividend Appreciation ETF › There are dozens of excellent low-cost index funds that pay dividends and could be great choices for long-term investors. However, a few stand out as particularly good combinations of income, long-term total return potential, and truly passive set-it-and-forget-it qualities. Most of my favorite income ETFs are Vanguard products, and it's easy to see why. Vanguard ETFs have some of the lowest expenses in the industry, and there are dozens of excellent index funds to choose from, in both mutual fund and ETF forms. With that in mind, here are three Vanguard ETFs that could help you create a passive income stream for decades to come in your portfolio. At first glance, the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG), with a 1.8% yield, might not sound like a great choice. But there are a few things to keep in mind. First, this is an index fund that focuses on stocks that are most likely to grow their dividends over time. So, if you want to create a passive income stream but are still a decade or more from retirement, this ETF is likely to produce a significantly higher amount of income in the future. Second, because it isn't too focused on the highest-yielding stocks, the portfolio of the Vanguard Dividend Appreciation ETF is a bit more growth-oriented than your traditional income ETF. In fact, the technology sector is its highest concentration, with top holdings that include Broadcom (NASDAQ: AVGO), Microsoft (NASDAQ: MSFT), and Apple (NASDAQ: AAPL). The proof is in the performance. Over the past decade, this ETF has generated 11.2% annualized total returns, and with a rock-bottom 0.05% expense ratio, you'll get to keep most of the fund's gains. One of the ETFs I've been buying rather aggressively in my own portfolio is the Vanguard International High Dividend Yield ETF (NASDAQ: VYMI). As the name suggests, this tracks an index of non-U.S. companies that pay above average dividend yields. As of the latest information, the fund owns 1,560 different stocks and has a 4.2% dividend yield. Not only can international stock exposure help diversify your portfolio and help offset U.S.-specific risk factors (like the trade tensions), but international stocks in general look cheap right now. For example, the average stock in the Vanguard International High Dividend Yield ETF trades for just 11.6 times earnings, compared with a P/E of 18.2 for stocks in the U.S. focused counterpart ETF, the Vanguard High Dividend Yield ETF (NYSEMKT: VYM). It's also worth noting that although these are international stocks, that doesn't mean its full of companies you've never heard of. In fact, top holdings include household names such as Toyota (NYSE: TM), Shell (NYSE: SHEL), and Unilever (NYSE: UL). Although there are questions surrounding how soon and how aggressively the Federal Reserve will lower interest rates, the overwhelming consensus is that the direction of interest rates over the next couple of years is going to be downward. Real estate is perhaps the most rate-sensitive part of the stock market. When rates are lower, real estate investment trusts can borrow money in a more cost-effective way, and commercial property values tend to rise, as yield plays a major role in their valuation. The Vanguard Real Estate ETF (NYSEMKT: VNQ) has underperformed the market for several years, but this is mainly due to the interest rate environment and not because there is anything fundamentally wrong with the stocks it owns. While there's still tremendous uncertainty about where interest rates are heading in the short term, it could be a smart time for long-term investors to take a closer look at this ETF. These certainly aren't the only three income ETFs I'm a fan of. There are some that take more active investment approaches on my radar, such as the options-focused JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ: JEPQ). However, as far as creating a truly passive income stream that you can simply set-and-forget goes, these three Vanguard Income ETFs could be excellent additions to your portfolio. Before you buy stock in Vanguard Dividend Appreciation ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard Dividend Appreciation 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 $640,662!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $814,127!* Now, it's worth noting Stock Advisor's total average return is 963% — a market-crushing outperformance compared to 168% 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 Frankel has positions in Vanguard International High Dividend Yield ETF and Vanguard Real Estate ETF. The Motley Fool has positions in and recommends Apple, Microsoft, Vanguard Dividend Appreciation ETF, Vanguard Real Estate ETF, and Vanguard Whitehall Funds-Vanguard High Dividend Yield ETF. The Motley Fool recommends Broadcom and Unilever and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Building a Passive Income Stream: 3 Top Dividend ETFs for Long-Term Returns was originally published by The Motley Fool
