Want to Get Richer? 2 Top ETFs to Buy Now

1 week ago

Exchange-traded funds (ETFs) can provide you with simple, low-cost ways to invest in the stock market. Some of the best funds make it easy to quickly gain exposure to an array of promising investments, such as dividend stocks and fast-growing small businesses. Here are two ETFs that look particularly well-positioned to deliver lucrative gains to their shareowners.

This dividend-paying ETF can help you boost your passive income

When you're rewarded with a steady stream of cash payments from your portfolio, the benefits of investing are made clear. You could use your dividend income to pay your bills, reduce debt, or invest in other wealth-building opportunities.

Better still, dividend-paying stocks tend to hold up relatively well during market declines. They're also typically less volatile than stocks that do not pay dividends. Moreover, stocks that consistently raise their cash payouts can help you generate bountiful streams of passive income that grow steadily over time.

If these aspects of dividend investing sound appealing, consider the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD). This low-cost fund tracks an index comprised of financially sound businesses with proven histories of sustaining their dividend payments to shareholders. This intelligent strategy has helped Schwab's ETF more than triple its investors' money over the past decade.

SCHD Total Return Price Chart

To be eligible for inclusion in the index the Schwab U.S. Dividend Equity ETF tracks, a company must have at least 10 straight years of dividend payments. The index prioritizes businesses with solid profitability metrics and reasonable levels of debt. Stocks are screened and ranked based on fundamental performance metrics, such as return on equity and free cash flow, as well as shareholder return metrics, like annual dividend yield and five-year dividend growth rate.

With positions in roughly 100 companies, Schwab's ETF is well-diversified across sectors. Major holdings include dividend stalwarts Home Depot, Verizon Communications, Chevron, Lockheed Martin, and Coca-Cola.

Importantly, Schwab charges low fees, so nearly all the fund's returns will go to shareholders. The Schwab U.S. Dividend Equity ETF has an annual expense ratio of 0.06%, which equates to just $0.60 per $1,000 invested per year.

This small-cap ETF could magnify your gains

Small-cap stocks can add another powerful growth element to your portfolio. The Vanguard Russell 2000 ETF (NASDAQ: VTWO) offers you an easy way to invest in these high-potential and rapidly expanding businesses. It's a smart approach that's generated total shareholder returns of over 125% over the past 10 years.

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