Are Dividend ETFs A Viable Income Alternative?

As bonds struggle, investors hunt for income. But not all ETFs are created equal Dividend investing never goes out of style. Over the past 100 years, dividends have accounted for some 47 percent of the S&P's total return. Lately, investors are combining their hunger for yield (paltry bond and some equity yields continue to disappoint) with the popularity of exchange-traded funds (ETFs). The category they're increasingly tapping includes dividend ETFs and specialized high-dividend ETFs.

"Beyond individual securities, investments in equity ETFs [that] have stocks that pay high dividend yields emerged as a source of decent income for investors at this time," said analysts at Zacks Investment Research, in a commentary. "This has proven to be a pretty good strategy as intermediate-term bonds are still yielding below broad stock markets and equities are rising so far in 2012."

Source: Chicago Tribune

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