Are you or your clients ready for retirement? Increasingly, older Americans fear that they will not have enough money for retirement. Despite a robust stock market, that concern may even hold true of investors with significant assets of their own. A current income strategy could provide a boost, then, to investors looking for a bit more as retirement nears. The T. Rowe Price Equity Income ETF (TEQI ) presents one potent option.
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TEQI actively invests for a 54 basis point fee, which is competitive in its category. It seeks out U.S., large-cap firms with a strong dividend history and are believed to be undervalued. It assesses firms based on their price-to-earnings ratio, above-average dividend yield, and low prices relative to firm fundamentals. By seeking out firms with higher dividend yields, it could help investors improve their current income derived from equity dividends.
Per VettaFi data, TEQI has provided a 2% annual dividend yield. That outperforms its FactSet Segment average, according to the ETF Database.
Equity Income ETF TEQI's Role
An equity income ETF like TEQI could help as the U.S. economy presents increasing uncertainty. Inflation has taken a big bite out of older Americans’ wallets. What’s more, while higher interest rates have helped reignite fixed income investing, rate uncertainty poses its own problems.
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For one, higher mortgage rates can make it harder for older homeowners to downsize. At the same time, higher debt servicing costs can harm those nearing retirement.
The equity income ETF TEQI, then, presents an appealing mix of investing traits. That dividend yield can help, while its equity exposure can help the strategy continue to benefit from a hot equity market. According to T. Rowe Price data, the fund has returned 20.9% over the last one-year period (through Q1). Taken together, TEQI may be worth eyeing in a turbulent economic landscape.
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