High-Yield Dividend ETF: A Passive Income Powerhouse

In today's investment landscape, generating passive income is a top priority for many investors. One strategy that stands out is investing in high-yield dividend exchange-traded funds (ETFs). These funds offer a combination of income and growth potential, making them an attractive option for income-focused investors. In this article, we will explore one such ETF, the iShares Core Dividend Growth ETF (DGRO), and discuss its potential as a passive income powerhouse.

The iShares Core Dividend Growth ETF (DGRO) is a compelling choice for generating passive income. With a recent yield of 2.24% and a five-year average annual return of 12.59%, DGRO offers a balance between income and growth. Its focus on dividend growth ensures that investors receive increasing income over time, making it a reliable source of passive income.
One of the key advantages of DGRO is its diversified portfolio. As of October 22, 2024, DGRO held 400 U.S. stocks, providing adequate exposure to various sectors and asset classes. Its top sectors include Technology (21.5%), Industrials (15.1%), and Healthcare (12.2%), offering a balanced mix of growth and income.

DGRO's expense ratio of 0.08% is one of the lowest among dividend ETFs, making it an attractive option for investors seeking to maximize their net income. Its historical performance is also noteworthy, with a 10-year average annual return of 12.49%, demonstrating consistent performance over the long term.
When compared to other dividend-paying investments, DGRO's combination of yield and growth potential makes it an attractive option. For instance, the Vanguard High Dividend Yield ETF (VYM) has a higher yield of 2.65% but a lower five-year average annual return of 11.34%. Meanwhile, the SPDR S&P Dividend ETF (SDY) has a lower yield of 2.22% but a higher five-year average annual return of 9.55%. DGRO's combination of yield and growth makes it an attractive option for income-focused investors seeking passive income and long-term appreciation.
In conclusion, the iShares Core Dividend Growth ETF (DGRO) is a high-yield dividend ETF worth considering for passive income generation. Its focus on dividend growth, diversified portfolio, and low expense ratio make it an attractive option for income-focused investors. By investing in DGRO, you can generate passive income while also benefiting from long-term capital appreciation.