Wednesday, July 25, 2007

The Pros and Cons of Dividend Fund / ETF

Dividend funds, whether you own the as mutual funds or as Exchange-traded fund (ETF) can be a stressless way to invest in a boarder stock market. Here is why:

(1) Dividend fund /ETF can serve as both offence and defence way whether the stock market is in a bull or bear market. For example, if the stock or fund declines 2% but paid 2.75% as dividend. The overall gain for the investor of the fund / ETF is 0.75% without factoring the tax calculation

(2) Dividend fund / ETF usually consists of solid blue chips company that has long record of profitability and stability. Dividend fund / ETF can be a great defensive method for long term investor.

So, whether or not you are thinking of having dividend funds in your portfolio. I believe each investor should have a basket of solid blue chips dividend paid companies.

For Dividend ETF, here are what I have invested:

FTN.TO (Financial 15 ETF)
DFN.TO (Dividend 15 ETF)

2 comments:

styrlicas said...

Since last July these funds are down 34%(FTN.TO) and 18%(DFN.TO). Leaves us wishing for more.

About Me said...

As of this year, FTN.TO is not paying dividend anymore due to the US Financial crisis. However, we still find DFN.TO is paying monthly dividend.