Who doesn’t love a high dividend yield? If you’re looking for some safety this year or just want a place where you can generate some recurring and consistent cash flow, an exchange-traded fund (ETF) that focuses on dividends can be a great option to add to your portfolio. The iShares Core High Dividend ETF (NYSE Arca: HDV) yields 3.5% and can allow investors to diversify their holdings in the process.
The fund focuses on the U.S. market and it holds 75 dividend-paying stocks. The top two stocks in the fund are Exxon Mobil (NYSE:XOM) and AbbVie (NYSE:ABBV), with each of them accounting for more than 7% of the ETF’s total weight. Other top dividend stocks in the fund include Verizon Communications (NYSE:VZ), Coca-Cola (NYSE:KO), and Procter & Gamble (NYSE:PG).
Nearly one-quarter of all the holdings in the ETF are in the healthcare segment, followed by 18% in energy and 17% in consumer staples. Other industries that the fund has exposure to include financials, technologies, utilities, and industrials. With a solid mix of sectors included, investors get a solid cross-section of dividend stocks with the Core High Dividend ETF. And what makes it an even more appealing investment is that its expense ratio is an incredibly minimal 0.08%.
Thus far in 2022, the Core High Dividend ETF has risen by 8%, outperforming the S&P 500 which has fallen by 6% over the same period. Although the fund hasn’t always outperformed the broad market, it could be an attractive buy this year for value and income-oriented investors, especially as inflation and rising interest rates make growth stocks look less desirable.