Dow Jones Bear Market: Buy the High-Yield HDV ETF While Markets Shift

With markets still volatile with trade war fears, geopolitical tension, and a weaker dollar, one of the best ways to safeguard your portfolio is with high-yielding assets.

Look at the iShares Core High Dividend ETF (NYSEARCA: HDV), which tracks the Morningstar Dividend Yield Focus Index.

With an expense ratio of 0.08% and a yield of 3.3%, the HDV ETF exposes investors to high-quality, high-paying dividend stocks. The income received from the HDV ETF can help offset losses from the overall market and provide steady cash flow along the way.

The HDV ETF often proves to be safer than the S&P 500

The HDV ETF yields 3.3%, which is significantly higher than the current yield of 1.27% from the S&P 500. In addition, the HDV ETF’s 17% return since the start of 2024, which is slightly above the 16% return of the S&P 500, is just as impressive.

It also provides exposure to solid, blue chip stocks with strong fundamentals and yield. Also, some of its 75 holdings include Exxon Mobil, Johnson & Johnson, Chevron, Procter & Gamble, AT&T, and Coca-Cola.

What makes the HDV ETF even more attractive is its cost of $113.84. If you wanted to buy 100 shares it would cost you $11,384 and would give you exposure to 75 stocks in the ETF. Meanwhile, if you were to buy 100 shares of just the stocks mentioned above, it would cost you just under $66,170 and you wouldn’t have the same diversification HDV offers.

Solid Yields and Low Fees Make It Even More Attractive 

Cost matters greatly when choosing an ETF, as high fees can erode returns over time. HDV is quite lean, with an expense ratio of just 0.08%. You only pay $8 annually for every $10,000 you invest and is lower than what you’d pay for the SPY. In exchange, you get a 3.3% yield.

Also, since the HDV ETF does exclude real estate investment trusts (REITs), its dividends are far more tax efficient than ETFs that do include REIT holdings. Instead, it is heavily concentrated in two sectors, including consumer staples and energy – which make up 50% of the fund.

We should also note that the HDV ETF yields 3.3%, which is significantly higher than the current yield of 1.27% from the S&P 500. In addition, the HDV ETF’s 17% return since the start of 2024, which is slightly above the 16% return of the S&P 500, is just as impressive.

It’s a popular choice, with nearly $11 billion in total assets. It’s also an index fund, which again tracks the Morningstar Dividend Yield Focus Index with a low expense ratio of just 0.08%.