Dividend ETFs vs. S&P 500: Where Should You Invest?
Dividend exchange-traded funds (ETFs) look for stocks with higher-than-average dividend yields, making them a good choice for income-oriented investors. The Standard & Poor’s (S&P) 500 is a broad index of large-cap American stocks. Some pay dividends, but others don’t.
You can’t invest directly in the S&P 500. You must buy a mutual fund or ETF that mirrors the S&P 500—such as the SPDR (SPY)—to gain exposure to the whole of the S&P 500. The S&P 500 is often better for those who are looking to balance capital growth and income potential. It offers diversification across several sectors and has a history of steady long-term returns.
Making an informed decision between investing in dividend ETFs or those tied to the S&P 500 index…
