Why Dividend Investors Should Buy the Vanguard Dividend Appreciation ETF Instead of AGNC Investment

Dividend investors are often designed for high yields like kites for a flame. When it comes to yield today, there are some that are more than scaffolding Agnc Investment‘S (Agnc 0.94%, 15%-Plus dividend yield. However, if history is a guide, then most investors will be better than buying Mohra Dividend Appreciation ETF (Wig 0.64%, Instead, even if it only has a relatively modest 1.8% yield. here’s why.

What do AGNC investment and pawn dividends appreciate ETF?

AgNC investment is a hostage Real Estate Investment Trust (MRIIT). It is a fairly complex niche within the broad REIT region. AgNC buys investment mortgage that is rolled into investments such as bonds, often using leviation to do so. Prices of mortgage securities can be affected with interest rates, housing market dynamics and hostage repayment, other things. And they trade throughout the day, so stocks such as AGNC investment can be quite unstable.

Image Source: Getty Image.

The Mohra Dividend Prasad ETF is a diverse exchange-trapped fund (ETF). It tracks the S&P US Dividend Growers Index. This index begins by taking all American companies that have increased their dividends for at least 10 years and then deleted 25% of the list. The rest of the market is found in the index (and ETF) based on cap waiting. Note that it is especially avoiding shares with the highest yield.

Income vs. Total return and back to income

Interestingly here: AgNC investment is very clear that income is not its primary goal. Management says its goal is “a sufficient long -term stockholder return with a sufficient yield component.” This means giving a strong total return, which considers dividend renovation, is the main goal, and AGNC investment has done well in killing that target.

Agnc Total Return Level Data by Ycharts.

Given the entire duration that AgNC investment and pawn dividends are both present, the AgNC investment has provided a slightly better return. But take a look at the dividend and price history of each of these investments. After the dividend of AgNC and the initial spikes at the price, it is all downhill. Conversely, both the dividends of the pawn dividend ETF and the share price are usually increased over time.

Agnc data by Ycharts.

A strong total return is great, but this metric is based on the notion that you are re -installed your dividend. Income investors usually want to stay away from dividends that generate their investment, which means spending them. As the chart above makes very clear, the dividend payouts of the AGNC investment are not durable, while the Mohra dividends were smaller payments from ETFs and usually growing over time.

In fact, AgNC investment has reduced its payment over 60% over time, while the total payment from the components of the Mohra dividend ETF has increased by more than 200%. For someone whose plan was included in the period in which dividends were used to help help cover their living expenses, it is very clear which investment would be a better option.

Agnc is not a bad investment

AgNC investment is not a bad investment – this is just one that requires a more fine view. Yes, its dividend yield is very large, but it is not necessarily a good income stock. Being its owner comes from re -establishing the real dividend and focusing on total returns, which is unlikely to do most dividend investors. If you are trying to stay away from income generated by your portfolio, the pawn dividend appreciation ETF, despite its very low yield, will probably be a better option for your portfolio.