A high rate of return, combined with a diversified portfolio of holdings, a low expense ratio, and a dividend yield of 2.9% above that of the S&P 500 November yield of 1.75%, is certainly what some might consider a great offer for reliable retirement income.
2. Fidelity Dividend ETF For Rising Rates
As the Fed hints at three rate hikes in 2022, it might benefit retirees to invest in ETFs that protect against those rates. The Fidelity Dividend ETF For Rising Rates (NYSEMKT: FDRR) can do just that. This fund focuses on tracking large- and mid-cap stocks that have historically paid and increased dividends and have a positive correlation to the 10-year U.S. Treasury Yields.
Top holdings include Apple, Microsoft, UnitedHealth, Pfizer, and Home Depot, providing a well-rounded group of stocks across various sectors. It also draws away from a high reliance on its top holdings by only investing 30% of its total fund weight into the top 10 holdings.
In times of uncertainty in the market, the Treasury yield can provide some investors relief. The Treasury yield is tied to Treasury securities backed by the U.S. government and comes with guaranteed interest payments. As volatility in the market grows, the investments in this fund can provide for some stability.
