Creating reliable passive income through exchange-traded fund (ETF) investments doesn't necessarily mean one has to seek out only ultra-high dividend yields, which often come with similarly significant management fees. It's possible to find attractive income funds that combine strong yields, broad diversification, and minimal costs. ETFs with expense ratios measured in just a few basis points can help to generate income from distributions while also providing the risk mitigation that comes with a broad basket of positions as opposed to individual securities.
The dividend ETF space is huge and only growing bigger, but three standout choices include the Vanguard High Dividend Yield ETF (NYSEARCA: VYM), the Vanguard Intermediate-Term Corporate Bond ETF (NASDAQ: VCIT), and the iShares Core U.S. Aggregate Bond ETF (NYSEARCA: AGG). Typically, bond funds are synonymous with dividend payments, and the latter two of these funds do indeed hold baskets of bonds, although with entirely different focuses. The first, however, is a stock ETF, providing diversification options across asset classes.
