Building a dividend portfolio with ETFs
I recently wrote on how to build an income portfolio through the share market. This follow-up article aims to address questions I received from readers on how to apply this strategy to ETFs.
Below I explain how I use ETFs in my own income investing strategy, but first, let’s explore the ways it works—and the potential pitfalls.
Using ETFs to build an income portfolio
The simple answer is yes, ETFs can be used to build an income portfolio, but there are some caveats.
A dividend reinvestment plan (DRIP) can be used for ETFs in the same manner they are used for individual shares.
Do ETFs pay dividends?
ETFs do not technically pay dividends and instead provide investors with distributions. The difference in terminology has implications.
