Retired investors are often looking for core exposure in funds that demonstrate low costs and steady income. These two attributes are key to maintaining a correlation with the market, while creating a passive stream of dependable dividends to offset living expenses. One fund company that offers several different options in this arena is the iShares suite of ETFs from BlackRock.
This fund company dominates the ETF landscape because they understand the importance of simple tools with a high degree of transparency and minimal fees. In fact, BlackRock has nearly $1 trillion in U.S.-based ETF assets and currently holds 40% of the market share overall. This means that their funds are highly liquid (great trade execution) and very tax-efficient (minimizing capital gains).
Without further preamble, let’s jump into my top four BlackRock ETFs for steady retirement income.
iShares Core High Dividend ETF (NYSEARCA:HDV)
I have held HDV as a core holding for subscribers in my Flexible Growth and Income Report for well over a year now and it continues to be a standout performer. This exchange-traded fund owns a diversified portfolio of 75 U.S. stocks that pay high dividend yields.
While there is some small and mid-cap exposure in this ETF, its index construction criteria skews the majority of the weighting towards large-cap stocks. Top holdings are well-known names such as Exxon Mobil Corporation (NYSE:XOM) and AT&T Inc. (NYSE:T).
The dividend stocks in this fund combine to produce a current 30-day SEC yield of 3.57% and income is paid quarterly to shareholders. HDV is the type of holding that can be used to maintain correlation with the stock market, while collecting an above-average income stream in the process.
It’s also worth noting that HDV has a very minimal expense ratio of 0.08%, which makes it suitable as a long-term core holding. The fund currently has over $6.4 billion in total assets as well.
iShares Core Dividend Growth ETF (NYSEARCA:DGRO)
An excellent broad-market supplement to HDV is DGRO, which focuses on companies with a consecutive history of growing their dividends. This makes for an attractive fundamental tailwind and commitment to returning business gains to shareholders.
DGRO is a multi-sector, multi-market cap index comprised of 425 U.S. stocks with consistent year-over-year dividend growth. The fund currently sports a 30-day SEC yield of 2.59% and income is paid quarterly to shareholders.
This ETF is also a core holding in my newsletter and continues to provide broadly diversified exposure to high quality stocks in a single low-cost vehicle. DGRO charges a similar expense ratio of just 0.08% annually and has nearly $1 billion in total assets.