Two ETFs That Are Good Choices for a Dividend Reinvestment Portfolio

The iShares Dow Jones Select Dividend Index (DVY) and PowerShares High Yield Equity Dividend Achievers Portfolio (PEY), two exchange-traded funds (ETFs) that hold dividend-paying stocks, are excellent choices for a dividend reinvestment portfolio. DVY tracks the Dow Jones Select Dividend Index and PEY tracks the Mergent Dividend Ahievers 50 Index.

Both ETFs are well diversified, pay healthy dividends and have low expenses. As of April 20, 2005 PEY holds 50 stocks and its annual expense ratio is only 0.5%. DVY holds 100 stocks and its annual expense ratio is a low 0.4%. Their dividends yields are higher than most equity income mutual funds and their expense ratios are much lower.