Latest news with #VanguardRealEstateETF
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
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
Yahoo
13-04-2025
- Business
- Yahoo
Stock Market Volatility Got You Down? Buy These Top Vanguard Dividend ETFs to Help Lessen the Blow.
The stock market has been rocked by volatility this year. The S&P 500 was recently down by about 10% since the calendar flipped the page to 2025. That volatility likely has your portfolio down deep in the red. While you can't eliminate market volatility from your portfolio, you can reduce its sting. One way to do that is by investing in dividend stocks. They provide you with a tangible return in the form of income. On top of that, companies that grow their dividends have historically been less volatile than the S&P 500 as a whole. Vanguard makes it easy to add dividend stocks to your portfolio through its many exchange-traded funds (ETFs). Three top Vanguard dividend ETFs to buy to help mute volatility are Vanguard Utilities ETF (NYSEMKT: VPU), Vanguard High Dividend Yield ETF (NYSEMKT: VYM), and Vanguard Real Estate ETF (NYSEMKT: VNQ). As the chart below showcases, they haven't slumped nearly as much as the S&P 500 this year: The Vanguard Real Estate ETF focuses on owning real estate investment trusts (REITs). These companies own income-generating real estate. They use that rental income to pay dividends and invest in additional income-generating real estate. Investing in real estate is a great way to diversify your portfolio and insulate it from some of the risks of investing in stocks and bonds. REITs have historically been much less volatile than the broader stock market. For example, of the 16 REITs that have been members of the S&P 500 over the past three decades, all but two have betas less than the S&P 500, meaning they've historically been less volatile than that index. A big driver of the lower volatility of REITs is their dividends, which tend to grow over the long term. The Vanguard Real Estate ETF currently has a dividend yield of around 3.5%, which is a lot higher than the S&P 500's 1.4% yield. That higher income yield provides investors with a higher base return, which also helps cushion some of the impact of volatility. The Vanguard High Dividend Yield ETF focuses on companies that pay high-yielding dividends. The fund currently has a dividend yield of around 2.7%, nearly double the S&P 500's dividend yield. Because of that, it provides investors with a higher base return. While the fund focuses broadly on stocks with higher dividend yields, most of its top holdings also have excellent records of growing their dividends, which helps mute volatility. For example, its top holding is semiconductor and software giant Broadcom. The technology company currently offers a dividend yield right around the S&P 500's level. However, Broadcom has a terrific record of delivering above-average dividend growth. Late last year, Broadcom hiked its payment by 11%. That extended its dividend growth streak to 14 straight years. The company has boosted its payout by a jaw-dropping 8,333% during that period. Another top holding is oil giant ExxonMobil. The big oil company currently offers a much higher dividend yield of around 4%. Exxon has a fantastic record of growing its dividend. The oil giant raised its payment by another 4% earlier this year, its 42nd straight year of increasing its dividend. The Vanguard Utilities ETF owns companies that distribute electricity, water, or gas to customers or produce power that they sell to other utilities and large corporate customers. Most utilities generate very stable cash flow because government regulators set their rates while demand for their services tends to be very steady, even during a recession. In addition, many utilities and utility-like companies produce additional revenue backed by long-term, fixed-rate contracts, providing them with additional sources of stable cash flow. The low-risk business models of most utilities enable them to generate stable cash flow to pay dividends and invest in expanding their operations. As a result, utilities tend to have a higher yielding dividend (The Vanguard Utilities ETF yields 2.9%) that slowly rises. For example, Duke Energy, one of its top holdings, has paid dividends for 99 straight years. While Duke Energy hasn't increased its payment every single year, it has raised its payment for the past 18 years in a row. That growth should continue as Duke invests heavily in supporting the growing demand for electricity in the regions it serves. Adding one or more Vanguard ETFs focusing on dividend stocks to your portfolio is a great way to reduce volatility. Dividend stocks have tended to be less volatile because their growing income payments help cushion the blow. That can help you sleep a little better at night knowing your portfolio has some added downside protection. Before you buy stock in Vanguard World Fund - 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 World Fund - 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 $495,226!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $679,900!* Now, it's worth noting Stock Advisor's total average return is 796% — a market-crushing outperformance compared to 155% 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 April 5, 2025 Matt DiLallo has positions in Broadcom. The Motley Fool has positions in and recommends Vanguard Real Estate ETF and Vanguard Whitehall Funds-Vanguard High Dividend Yield ETF. The Motley Fool recommends Broadcom and Duke Energy. The Motley Fool has a disclosure policy. Stock Market Volatility Got You Down? Buy These Top Vanguard Dividend ETFs to Help Lessen the Blow. was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
10-03-2025
- Business
- Yahoo
These 3 Simple Real Estate ETFs Could Turn $500 a Month Into $1 Million
Real estate has been one of the worst-performing stock market sectors in recent years, mainly thanks to interest rate headwinds. While this hasn't exactly been a great catalyst for real estate investment trust (REIT) returns lately, it has created opportunities for long-term investors to add top-quality real estate exchange-traded funds (ETFs) at relatively cheap valuations. With that in mind, here are three real estate ETFs in particular that could be worth a closer look for long-term investors right now. Investing just $500 per month in REITs can make you a millionaire, so here are the ETF details and why they could be such effective wealth-creation tools. There's a solid case to be made for investing only in the Vanguard Real Estate ETF (NYSEMKT: VNQ) for real estate exposure. In full disclosure, this is the only real estate ETF I own in my portfolio, although I do own shares of some individual REITs. The Vanguard Real Estate ETF tracks an index of U.S.-based real estate investment trusts. As of the latest information, there are 158 stocks in the portfolio. It is a weighted index, which means larger REITs comprise a greater percentage of the assets. To name just a few, some of the largest holdings include Prologis, Equinix, Simon Property Group, and Realty Income. As of this writing, the Vanguard Real Estate ETF has a 3.6% dividend yield. This ETF has a low 0.13% expense ratio, meaning you'll pay $13 in investment fees for every $10,000 invested. (This isn't a fee you must pay. It will simply be reflected in the fund's performance over time.) One thing I've been doing in my own portfolio lately is trying to add some geographic diversification. And while I haven't pulled the trigger yet, one ETF toward the top of my watch list right now is the Vanguard Global ex-U.S. Real Estate ETF (NASDAQ: VNQI). Similar to the Vanguard Real Estate ETF, this fund tracks a weighted index of REITs. There are currently 678 of them in the portfolio, and the largest exposures are to Japan (23% of assets), Australia (12%), and the U.K. and Hong Kong (7% each). It might surprise you to learn that the international version actually has a slightly lower expense ratio (0.12%) than the Vanguard Real Estate ETF. It is also a higher-paying ETF, with a 5% yield as of this writing. The JPMorgan Realty Income ETF (NYSEMKT: JPRE) has the highest expense ratio in this discussion, with a 0.50% annual cost. However, this is an actively managed ETF that aims to find undervalued REITs with excellent financial strength and growth potential. In a nutshell, the goal of this ETF is to beat the REIT index that the Vanguard Real Estate ETF tracks. It is a rather concentrated ETF, with just 31 stocks as of the latest information. There is certainly some portfolio overlap with the Vanguard index fund, but there are also some smaller REITs, such as Camden Property Trust, among the top holdings. To be clear, you don't need to take an active approach to REIT investing to produce strong returns over time, as I'll discuss in the next section. But if you want to take a chance of beating the index, this ETF could allow you to do it. To be sure, there's no way to know for sure what these ETFs (or any ETFs) will do over any period in the future. But historically speaking, REITs have delivered annualized total returns of 10%-12% over long periods of time and with significantly lower volatility than the S&P 500. For example, in the 20-year period ending in 2023, REITs produced annualized total returns of 10.4%. Using this rate of return, a $500 monthly investment in real estate ETFs like the three discussed here could grow to $1.06 million in 30 years. Of course, there's no way to predict future returns of any investment with complete accuracy. But the point is that for investors who measure their returns in decades, incrementally building positions in real estate investment trusts and holding them for long periods has been a winning strategy. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $292,207!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $45,326!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $480,568!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of March 3, 2025 Matt Frankel has positions in Prologis, Realty Income, Simon Property Group, and Vanguard Real Estate ETF. The Motley Fool has positions in and recommends Equinix, Prologis, Realty Income, Simon Property Group, and Vanguard Real Estate ETF. The Motley Fool recommends Camden Property Trust and recommends the following options: long January 2026 $90 calls on Prologis. The Motley Fool has a disclosure policy. These 3 Simple Real Estate ETFs Could Turn $500 a Month Into $1 Million was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
15-02-2025
- Business
- Yahoo
3 Vanguard ETFs to Buy With $1,000 and Hold Forever
Vanguard ETF are some of the most popular exchange-traded funds among investors, and for good reasons. Not only are there Vanguard ETFs that allow you to invest in virtually any stock market index, sector, or category of stocks, fixed-income, or commodities you want, but Vanguard funds give everyday investors a cost-effective way to do it. Some Vanguard ETFs have expense ratios as low as 0.03%, which means the annual costs of a $1,000 investment are just $0.30. To be clear, an ETF's expense ratio isn't a fee you have to pay. It will simply be reflected in the fund's performance over time. As of this writing, there are 88 different Vanguard ETFs listed on the firm's website. And to be clear, there's a solid investment case to be made for most of them, especially for long-term investors trying to build a diversified portfolio. However, there are some that could be better ways to put your $1,000 to work than others. Here are three in particular that look interesting right now. Regardless of stock market conditions or the economic climate, it's tough to make the case against owning the Vanguard S&P 500 ETF (NYSEMKT: VOO) as a long-term investment. This ETF tracks the S&P 500 benchmark index, which is widely considered to be the best overall barometer of how the U.S. stock market is doing. Over long periods of time, the S&P 500 has produced annualized returns of 9%-10%, depending on the exact period you're looking at. To put this in perspective, a $1,000 investment compounded at 10% for 40 years would be worth more than $45,000. Now imagine if you invest $1,000 in the S&P 500 at regular intervals over time. It's important for new investors to realize that not all stock market millionaires get that way by choosing individual stocks. Many get there by simply buying the S&P 500, investing regularly, and holding for a long time. While real estate is one of the official stock market sectors, it is often considered to be a different asset class than stocks. The Vanguard Real Estate ETF (NYSEMKT: VNQ) tracks an index mostly composed of real estate investment trusts, or REITs (pronounced "reets"). Just to name a few of the largest REITs you might have heard of, Prologis (NYSE: PLD) owns over a billion square feet of warehouses, Public Storage (NYSE: PSA) owns thousands of self-storage properties, and Simon Property Group (NYSE: SPG) owns some of the busiest shopping malls in the world. In order to be classified as a REIT, a company must distribute at least 90% of its taxable income to shareholders, which makes these excellent dividend stocks. As of this writing, the Vanguard Real Estate ETF has a dividend yield of about 3.8%. Over the long term, the combination of dividend income and appreciation of real estate values can result in excellent total returns. Last but certainly not least, the Vanguard ETF I have been buying for my own portfolio recently is the Vanguard Russell 2000 ETF (NASDAQ: VTWO). This tracks the Russell 2000 index, which is the most popular index of small cap stocks in the market. There are a few reasons why the Russell 2000 looks especially attractive right now. For one thing, small caps can be major beneficiaries of falling interest rates, as smaller companies (as a group) are more debt-reliant than their large-cap counterparts. They could also be big winners of the Trump administration's efforts to reduce regulations on businesses. It's also worth mentioning that small cap stocks are trading for their lowest valuations on a price-to-book basis, relative to large caps, in over 25 years. The average Russell 2000 stock trades for a price-to-book multiple of 2.0, while the typical S&P 500 component has a P/B of 4.8. The last time the valuation gap was this wide was in 1999, and small caps went on to outperform for more than a decade. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $350,809!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $45,792!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $562,853!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of February 3, 2025 Matt Frankel has positions in Prologis, Public Storage, Simon Property Group, Vanguard Real Estate ETF, Vanguard Russell 2000 ETF, and Vanguard S&P 500 ETF and has the following options: short February 2025 $110 puts on Prologis. The Motley Fool has positions in and recommends Prologis, Simon Property Group, Vanguard Real Estate ETF, and Vanguard S&P 500 ETF. The Motley Fool recommends the following options: long January 2026 $90 calls on Prologis. The Motley Fool has a disclosure policy. 3 Vanguard ETFs to Buy With $1,000 and Hold Forever was originally published by The Motley Fool
