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Dear Fellow Investor,
Three Yielding ETFs to Help Keep Your Portfolio Safe
Markets continue to push higher, defying a long list of economic concerns that many investors find difficult to ignore. Inflation has moderated but remains a watch point, interest rates are still historically elevated, geopolitical risks persist, and questions around economic growth refuse to go away.
In this type of environment, fear can be a powerful—and costly—force.
When volatility rises or uncertainty dominates headlines, many investors are tempted to sell everything and move to the sidelines. While that reaction may feel prudent in the moment, history shows it is often one of the worst decisions an investor can make. Selling after markets have already become volatile locks in losses and removes the opportunity to participate in eventual recoveries.
Markets have endured recessions, wars, financial crises, inflation shocks, and aggressive tightening cycles—and yet they have consistently recovered over time.
Rather than abandoning the market altogether, a more effective strategy during uncertain periods is to focus on resilience. That means emphasizing income, quality, and diversification—characteristics that can help smooth volatility while still allowing portfolios to grow.
One of the most efficient ways to do that is through yielding exchange-traded funds (ETFs), particularly those focused on high-quality dividend-paying companies.
Why Yielding ETFs Make Sense in Uncertain Markets
Dividend-paying stocks have historically played an important defensive role in portfolios. Companies that consistently generate cash flow and return capital to shareholders tend to be more mature, financially stable, and disciplined.
During periods of market stress, dividends can provide a tangible return even if share prices fluctuate. Over time, reinvested dividends have also accounted for a significant portion of total equity market returns.
ETFs focused on dividends offer several advantages:
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Steady income that can offset volatility
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Built-in diversification across dozens or hundreds of companies
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Lower single-stock risk compared to picking individual dividend names
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Cost efficiency, especially with large, established funds
Below are three yielding ETFs that can help investors protect capital while maintaining exposure to the equity market.
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ETF: Vanguard Dividend Appreciation ETF (SYM: VIG)
The Vanguard Dividend Appreciation ETF is designed for investors who prioritize consistency and quality over headline-grabbing yield.
With a very low expense ratio of just 0.05% and a yield of approximately 1.73%, VIG focuses on companies with a strong track record of dividend growth rather than simply the highest current payouts.
The ETF tracks the S&P U.S. Dividend Growers Index, which includes large-cap companies that have increased their dividends for at least 10 consecutive years. This requirement helps filter out weaker firms and emphasizes businesses with durable earnings power and disciplined capital allocation.
VIG currently holds more than 300 companies across a wide range of sectors. Some of its largest positions include Apple, Microsoft, Broadcom, JPMorgan Chase, Eli Lilly, Visa, Exxon Mobil, UnitedHealth Group, Mastercard, and Costco Wholesale.
These are not speculative names. They are global leaders with strong balance sheets, pricing power, and long-term growth drivers. While VIG’s yield may be lower than some high-dividend alternatives, its focus on dividend growth has historically resulted in attractive total returns with less volatility than the broader market.
For investors looking to play defense without sacrificing long-term upside, VIG offers a compelling balance.
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ETF: Fidelity High Dividend ETF (SYM: FDVV)
For those seeking a higher level of income, the Fidelity High Dividend ETF provides a different approach.
FDVV carries an expense ratio of 0.16% and offers a yield of approximately 3.26%, making it a meaningful income-generating option within an equity portfolio.
The ETF tracks the Fidelity High Dividend Index, which focuses on large- and mid-cap dividend-paying companies expected to maintain and grow their payouts. Unlike some high-yield strategies that concentrate heavily in a single sector, FDVV maintains broad diversification across industries.
Top holdings include well-known companies such as Apple, Microsoft, Nvidia, JPMorgan Chase, Visa, Exxon Mobil, Philip Morris, and Procter & Gamble.
This mix provides exposure to technology, financials, consumer staples, and energy—sectors that often perform differently across economic cycles. The result is a more balanced income strategy that does not rely exclusively on traditional “defensive” sectors.
FDVV may appeal particularly to investors who want stronger current income while still maintaining exposure to growth-oriented companies.
ETF: iShares Core High Dividend ETF (SYM: HDV)
The iShares Core High Dividend ETF takes a more concentrated approach, focusing on relatively high dividend-paying U.S. equities with strong fundamentals.
HDV has an expense ratio of 0.08% and a yield of approximately 3.3%, placing it among the higher-yielding options in the large-cap dividend ETF space.
The fund tracks an index composed of companies selected not just for yield, but also for financial health metrics such as profitability and balance sheet strength. This helps avoid so-called “dividend traps”—stocks with high yields that may not be sustainable.
HDV holds roughly 75 companies, making it more concentrated than VIG or FDVV. Top holdings include Exxon Mobil, Johnson & Johnson, Progressive Corp., Chevron, AbbVie, Philip Morris, AT&T, and Coca-Cola.
These businesses tend to generate stable cash flows and operate in sectors that can remain resilient even during economic slowdowns. While HDV may experience less upside during strong bull markets, its income profile and defensive characteristics can be valuable during periods of uncertainty.
Stansberry Research
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Are there any other dividend ETFs that you swear by? What other sectors of the market are you currently interested in? Hit "reply" to this email and let us know your thoughts!
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