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Retirees: 3 Top ETFs to Hold Forever

exchange-traded funds
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The COVID-19 pandemic changed the retirement landscape for millions of Canadians. Many workers were forced to work from home for the long term, which dramatically changed work-life balance for those who were not used to this arrangement. Meanwhile, interest rates fell further in response to the economic turmoil. This means that retirees will be forced to assume more risk in order to churn out steady income in their portfolios. Earlier this week, I’d looked at some of the top dividend stocks for retirees to buy. Today, I want to look at three ETFs that are perfect for a retirement portfolio.

Retirees looking for a balanced approach in their portfolio should consider this fund

iShares S&P/TSX Canadian Dividend Aristocrats ETF (TSX:CDZ) is a top ETF that offers diversified exposure to a portfolio of high-quality, Canadian, dividend-paying stocks. Its shares have climbed 20% in 2021 as of close on August 25. It is up 31% from the prior year.

Retirees should be attracted to an ETF that screens for large, established Canadian companies that have hiked cash dividends for at least five consecutive years. Better yet, holders of this ETF can count on consistent monthly income. It last paid out a monthly distribution of $0.085 per share. That represents a 3% yield.

An ETF that provides strong bond exposure

Retirees and conservative investors on the hunt for steady income will inevitably run into the debate over the viability of bonds. Traditionally, bonds offer more security and stability than equities while also paying regular income. BMO Aggregate Bond ETF (TSX:ZAG) offers retirees a chance to own high-quality bonds through a more flexible investment vehicle.

Shares of this bond-focused ETF have dropped 4.6% so far this year. The ETF has dropped marginally over the past six months. This fund is designed to replicate the performance of the FTSE Canada Universe Bond Index. It is considered a very low-risk fund, which should pique the interest of retirees who are on the hunt for security and stability in their post-work life.

This ETF last paid out a monthly distribution of $0.04 per share, which represents a 3% yield. Retirees hungry for bond exposure should look to this vehicle in late August.

Here’s an ETF that provides more monthly dividends for retirees

The third ETF I want to look at for retirees is focused on generating monthly income over the long term. iShares Diversified Monthly Income ETF (TSX:XTR) offers access to a portfolio of income-bearing asset classes. This includes equities, fixed-income securities, and real estate investment trusts. Shares of this ETF have climbed 5.2% in the year-to-date period. In addition to providing monthly income, this fund has also provided consistent capital growth.

This ETF last paid out a monthly dividend of $0.04 per share. That represents a solid 4.5% yield. Retirees who want an income-yielding fund with a bit more punch should seek this one out.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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