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Four ways to find diversified dividends

Income-specific managed funds can offer less risk than owning individual shares for yield.

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Income investors often buy stocks directly for fully franked yield. But that strategy has individual company risk, particularly for investors with low portfolio diversification.

A better approach is using unlisted or listed management funds that target yield. The benefit is professional funds management and diversification through a portfolio of securities. The main downside is fees, although that can be reduced through low-cost exchange-traded funds (ETFs).

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Tony Featherstone writes on Personal Finance specialising in Superannuation & SMSFs, Specialist Investments. Email Tony at tony@featherstone.com.au

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    Original URL: https://www.afr.com/wealth/personal-finance/four-ways-to-find-diversified-dividends-20210901-p58nsy