An ETF is an investment vehicle made up of multiple stocks, bonds or other assets traded on the public markets. Unlike mutual funds, you can buy and sell ETFs throughout the day, similar to a single share of stock. This makes them a convenient and affordable option for retail investors.
As ETFs include individual stocks, most have at least a few assets that issue dividends at least once a month. Where the ETF dividends go and how they split up depends on the company managing the fund. While most ETFs distribute at least a portion of their returns to fund holders in the form of dividend payments, some may choose to reinvest the dividends into the fund's assets or other management projects.
If you're looking to invest in an ETF and want to be sure that it distributes a dividend to shareholders, be sure to check the fund's dividend yield before you place a buy order. You can browse some of the best dividend ETFs or start your search by exploring today's top high-yield dividend stocks on MarketBeat.