Accumulating $1 Million: A Simple ETF Strategy with iShares Core High Dividend ETF

https://icaro.icaromediagroup.com/system/images/photos/16382223/original/open-uri20241026-57-1wty45e?1729974212
ICARO Media Group
News
26/10/2024 20h17

### How a Simple ETF Could Transform $300 a Month into $1 Million

Investing wisely in exchange-traded funds (ETFs) can pave a solid path to financial growth, and the iShares Core High Dividend ETF is an exemplary choice. This remarkable investment tool offers a simple yet effective strategy to substantially grow wealth over time.

Since its inception, the iShares Core High Dividend ETF has delivered an average annual total return of 10.3%. By focusing on established U.S. companies that pay high-yielding dividends, the ETF ensures a reliable income stream. With a diverse portfolio of 75 high-quality dividend stocks, this fund has consistently outperformed many of its peers.

Historically, dividend stocks within the S&P 500 have achieved an average annual total return of 9.2% over the past 50 years. This performance significantly surpasses the 4.3% average annual return of dividend non-payers. Companies that both grow and initiate dividends have seen the best returns, averaging 10.2%.

A distinguishing feature of the iShares Core High Dividend ETF is its focus on higher-yielding stocks. Its average dividend yield over the last year was around 3.4%, which doubles the S&P 500's yield. Research from Wellington Management indicates that companies with higher dividend payout ratios tend to outperform their lower-yielding counterparts.

The ETF's top holdings include energy titans ExxonMobil and Chevron, which hold a combined weighting of 16.6% in the fund. ExxonMobil has an impressive record, having increased its dividend for 41 consecutive years at an average annual rate of 5.8%. The company paid $4.3 billion in dividends in the second quarter alone and offers a current yield of 3.1%. Complementing this, Chevron, with a dividend yield of 4.3%, has consistently raised its payout for 37 years, including an 8% increase most recently.

By investing $300 monthly into the iShares Core High Dividend ETF, investors can potentially accumulate $1 million in approximately 33 years, based on its historical average annual return. This ETF's combination of high-yielding dividends and robust returns makes it a powerful tool for long-term wealth growth.

The views expressed in this article do not reflect the opinion of ICARO, or any of its affiliates.

Related