Skip to Content
ETF Specialist

4 Medalist ETFs That Help You Reach for Yield With Less Risk

This dividend strategy mitigates risk and offers above-market yields.

Mentioned: , , , ,

Not all dividend strategies are alike. Some prioritize dividend growth, while others prioritize current income. Those that aggressively chase yield are often riskier than their growth-oriented counterparts, as many of their holdings offer high yields because of falling share prices often resulting from deteriorating fundamentals. Additionally, these companies may pay out a large share of their earnings and have a narrow buffer to cushion these payments if their business weakens.

While a narrow focus on yield increases the risk of overweighting low-quality firms, a narrow focus on dividend growth is often accompanied by low current yields. A trade-off for low current yields in exchange for higher payouts in the future may result in a portfolio with only a minimal yield pickup relative to the total market. There is a middle ground of dividend strategies that mitigate risk and yet offer above-market yields. This article will illuminate some Morningstar Medalists that offer a yield pickup compared with Vanguard Total Stock Market ETF (VTI), while demonstrating a history of increasing dividend payments.

Venkata Sai Uppaluri does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.