Dividend ETF

Dividends are a great way to earn some cash on your investments. Just ask billionaire Warren Buffett, who netted a cool $43 million in dividends through his personal portfolio. You can do likewise, albeit on a smaller scale, with exchange traded funds (ETFs) that invest in a diversified array of top dividend-paying companies.

Last year, Warren Buffett’s personal portfolio generated a 2.3% dividend yield, reports Don Dion of The Street. Compare that to a 3.5% yield on the iShares Dow Jones Select Dividend Index Fund (NYSEArca: DVY). Yes, by owning this fund, you would have earned a greater dividend yield than Buffett! [How Dividends Can Add Oomph to Your Portfolio.]

DVY tracks the Dow Jones U.S. Select Dividend Index, which is made up of more than 100 top dividend-paying companies such as McDonald’s (NYSE: MCD) and Chevron (NYSE:CVX). Broken down, the fund is more than 25% invested in utilities and about 50% in consumer goods, industrials, and financials.

As of March 10, 2010, 10% of companies in the S&P 500 increased their dividends. With signs of a continued economic rebound and companies with strong balance sheets, that trend looks to continue.

Whether you’re looking to generate good dividend yields or establish a strong foundation for a successful ETF portfolio, DVY is one of several places you can look. We’ve listed more below! [Dividend-Yielding ETFs.]

For more stories on dividend yielding ETFs, visit our dividend ETFs category.

DVY, DES, SDY, VYM, DTN