{"id":7113,"date":"2013-10-30T15:13:27","date_gmt":"2013-10-30T22:13:27","guid":{"rendered":"http:\/\/www.marketriders.com\/investing\/?p=7113"},"modified":"2016-12-21T07:28:20","modified_gmt":"2016-12-21T15:28:20","slug":"etf-funds-generate-income-portfolio","status":"publish","type":"post","link":"https:\/\/www.marketriders.com\/investing\/etf-funds-generate-income-portfolio\/","title":{"rendered":"ETF Funds That Generate Income For Your Portfolio"},"content":{"rendered":"

Investors tend to think about appreciation when they think ETF funds. And that make sense: The first ETF in the United States tracked the S&P 500, a straight\u00a0stock investment<\/a>.<\/p>\n

Today that fund, the\u00a0SPDR S&P 500 ETF Trust (SPY), is a monster at $140 billion in assets under management. The next runner up,\u00a0Vanguard\u00a0Total\u00a0Stock Market ETF (VTI), is at $127 billion. From there, net assets among ETF funds drops off to less than $50 billion each, down the list.<\/p>\n

\"etf<\/p>\n

We get it. People want to\u00a0time the market<\/a>. But they should also think of\u00a0ETFs\u00a0when they think of income. Yes, there are some wacky yields out there, funds which purport to track fast-moving Korean equities or Brazilian currency movements.<\/p>\n

But we’re talking about much more pedestrian, and predictable, products. For instance,\u00a0Vanguard\u00a0Total\u00a0Bond Market ETF (BND) currently yields 2.47%. The\u00a0SPDR Dow Jones REIT (RWR), which follows\u00a0real estate investment trusts<\/a>, pays 3.17%.<\/p>\n

A little further up the risk curve we find\u00a0Vanguard FTSE Emerging\u00a0Markets\u00a0ETF (VWO), paying 3.36%. Even SPY pays 2.02%.<\/p>\n

If your taste for risk is sufficient, you can put some of your investment portfolio into high-yield debt. The\u00a0SPDR\u00a0Barclays\u00a0High Yield Bond (JNK) is paying 6.38% right now.<\/p>\n

Yes, junk bonds. No, not half your portfolio. But if you are used to buying debt for the short-term bump in yield and are willing to\u00a0rebalance<\/a>\u00a0over time, a smidgen of “junk” can bring up your total portfolio income level.<\/p>\n

Why use\u00a0ETFs\u00a0to do this? Well, because they are cheap and simple. For instance, there are quite a few real estate investment trusts out there, dozens of them. They invest in healthcare facilities, malls, apartment complexes \u2014 you name it.<\/p>\n

ETF funds for total return<\/h2>\n

Which is best? It doesn’t matter if you use\u00a0ETF funds<\/a>\u00a0to own them all. The market will, in time, sort out winners from losers. That’s what markets do.<\/p>\n

You need only concern yourself with having at least one foot in the game. While you’re there, you might as well enjoy the income flow these kinds of investments bring.<\/p>\n

Income-oriented plays generate cash for you to reinvest. Some of your return will come from selling positions in a timely fashion, yes, but some will come from yield, what investing professionals call “total return.”<\/p>\n

Using ETF funds to achieve this is nothing more than\u00a0diversification<\/a>\u00a0in practice. That you get a bump of income to use or invest alongside, well, that’s just smart.<\/p>\n","protected":false},"excerpt":{"rendered":"

Investors tend to think about appreciation when they think ETF funds. And that make sense: The first ETF in the United States tracked the S&P 500, a straight\u00a0stock investment. Today … Read more →<\/span><\/a><\/p>\n","protected":false},"author":8,"featured_media":7114,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_wp_rev_ctl_limit":""},"categories":[7],"tags":[62,51,43,37],"yoast_head":"\nETF Funds That Generate Income For Your Portfolio | MarketRiders<\/title>\n<meta name=\"description\" content=\"Investors tend to think about appreciation when they think ETF funds. And that make sense. 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