• Particular dividend shares (ie high-yield companies or dividend growers).
• Specific sectors (like financial services, healthcare or real estate).
• Certain regions (such as UK or US shares or emerging market stocks).
• Different asset classes (including stocks, bonds and property).

Have £20,000 to invest in a Stocks and Shares ISA? I think the iShares MSCI Target UK Real Estate (LSE:UKRE) and Global X SuperDividend ETF (LSE:SDIP) are brilliant funds to consider. Based on current forecasts, a lump sum of this size spread equally will generate £1,615 in dividends this year alone, tax free.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

7% dividend yield!

The iShares MSCI Target UK Real Estate ETF generates income by holding a range of real estate investment trusts (REITs). These companies collect rents and distribute the bulk of this income to shareholders. Under REIT rules, at least 90% of annual rental profits must be paid out. That’s in exchange for tax breaks.

This particular fund holds 25 property companies in total, spread across sectors including self-storage, logistics, data centres and student accommodation. This helps it provide a stable income across the economic cycle.

Could returns disappoint if interest rates increase? It’s possible, as higher borrowing costs put a dent in rental earnings. However, the fund’s diversified approach and those REIT dividend rules mean I’m confident it can keep paying large dividends.

That’s not the only defensive tool in its arsenal. Today, more that 40% of the ETF is also invested in UK government bonds. These help the fund pay a predictable income even if its occupancy or rent collection problems spring up for its property holdings.

The forward dividend yield here is around 7%. That’s more than double the corresponding FTSE 100 average (3.1%).

Another top ETF to consider?

The Global X SuperDividend ETF offers a more international flavour, as its name suggests. Yet that’s not the only advantage it offers from a diversification standpoint.

The fund invests in “up to 100 of the highest dividend paying equities around the world“. However, these aren’t confined to one sector — indeed, it’s well diversified across a range of industries including financial services, energy, property, consumer goods and healthcare.

What I like about this is it also provides scope for better long-term capital growth than funds that are just focused on defensive sectors. Be aware though, this can also leave its share price more exposed during market downturns.

Back onto dividends, and Global X’s yield for this year is an enormous 9.1%. Based on my research, that makes it potentially the fifth-best-paying ETF in the UK today.

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This is where buying dividend stocks comes in. Past performance isn’t always a reliable guide to future returns. However, companies with strong dividends often outperform during periods of share price pressure, providing an income that can deliver a robust overall return.

With this in mind, I believe investors should consider buying Invesco Bond Income Plus (LSE:BIPS), iShares MSCI Target UK Real Estate ETF (LSE:UKRE), and Standard Life (LSE:SDLF). These dividend stocks, investment trusts, and exchange-traded funds (ETFs) each carry dividend yields above 7%.

Plus point

Invesco Bond Income Plus is an investment trust specialising in “high-yielding fixed-interest securities“. A focus on coupon-paying corporate bonds could be an attractive strategy today by protecting investors from potential stock market volatility.

There is some risk by focusing on debt securities, though. With economic conditions worsening, companies could default on their loan obligations. Just under three-quarters of bonds this trust holds are below investment-grade status, which can be particularly dicey in a tough landscape.

However, a bond portfolio like this allows Invesco Bond Income Plus to offer super-high dividend yields. Today this sits at 7.1%. And with a diversified mix of holdings spanning industries and regions, the trust’s set up to reduce risk to shareholder payouts. Excluding pandemic-hit 2020, it’s paid a stable or growing dividend every year since 2013.

Top trust

The iShares MSCI Target UK Real Estate ETF has proved a brilliant dividend payer over time. The reason why? It focuses chiefly on property-owning real estate investment trusts (REITs), which pay at least 90% of annual rental profits out to shareholders.

What I like about this fund is the wide range of REITs it holds (26 in total). These include specialists in logistics, office spaces, student accommodation, and food retail, a mix that spreads risk if the economy worsens. That’s not all — the ETF also holds fixed income securities, adding more defensive steel.

Property occupancy and rent collection issues are still a threat, but that portfolio mix significantly reduces the potential impact on dividends. The yield here is a large 7.2%.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

A FTSE favourite

Standard Life offer the second-highest dividend yield on the FTSE 100, at 7.9%. In my view, it’s one of the strongest income stocks to consider right now.

This comes down to the strength of the firm’s balance sheet. Financial services companies like this are required to maintain a minimum Solvency II capital ratio of 100%, but Standard Life’s is 176%.

That gives me confidence in the firm’s ability to keep delivering index-beating payouts. In fact, analysts believe its strong financial foundations could even prompt sizeable share buybacks despite the uncertain outlook.

Standard Life’s share price could slip if economic conditions worsen and earnings drop. But I still believe it will achieve solid long-term growth as its markets steadily expand.

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So how large must one’s ISA be to deliver a monthly passive income of £700? And how long could it take? Let’s do some quick maths to find out.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

The choice is yours

A £700 monthly income comes out at £8,400 a year. If someone decided to withdraw 4% a year from their ISA, they’d need a nest egg worth £210,000.

It’s a target that’s quite achievable by investing little and often in the stock market. How about a £300 monthly investment? At this level, someone could realistically reach that £210k goal in just over 20 years. That’s based on an average annual return of 9%.

The ‘4% method’ is a popular one with investors due to its simplicity. But there’s more than one way to skin a cat, as they say. Another popular way investors target a second income is to live off the dividends delivered by high-yield shares.

Someone who invested their money in 7%-yielding dividend stocks for a £700 monthly income would need a much smaller ISA of £120,000. That would take just over 15 years to build, based on the same £300 regular investment and 9% yearly return.

What should you buy?

The trouble with this strategy is that dividends are never guaranteed, making the 4% drawdown method a potentially safer choice. But I personally prefer the dividend share method, which — as you can see — may deliver a chunky passive income with a far smaller portfolio. It also provides greater scope for further ISA growth, as capital isn’t being steadily withdrawn.

Investors can spread the risk they face too by buying a wide selection of shares. That way, the Stocks and Shares ISA can still (touch wood) provide a healthy stream of dividends even if one of two of its shares experience problems.

I like the idea of individual share investing, but funds like the iShares MSCI Target UK Real Estate (LSE:UKRE) can be a powerful weapon to achieving a resilient income over time. This exchange-traded fund (ETF) holds shares in a whopping 26 different dividend-paying stocks.

A top fund to consider

There’s a risk this fund will lose value if oil prices keep rising, pushing up interest rates and hitting asset values. But this likely won’t affect its ability to deliver large dividends. So what makes it worth serious consideration?

As a fund specialising in real estate investment trusts (REITs), it holds companies that must pay out a minimum each year in dividends. This stands at 90% of their annual rental profits, in fact.

Of course payouts can disappoint if the 26 REITs the fund holds have rent collection or occupancy issues. However, the thousands of tenants these companies cumulatively hold can still make this ETF a great source of second income.

The post How much do I need in an ISA for a £700 second income? appeared first on The Twelfth Magpie.

There are over 2,300 ETFs listed on the London Stock Exchange, so we’re pretty spoilt for choice in the UK on this front.

Here, I’ll look at an ETF offering a 5.31% dividend yield. This one’s also gathering a bit of momentum, having risen almost 8% since mid-December.

UK property

The fund in question is iShares MSCI Target UK Real Estate UCITS ETF (LSE:UKRE). As you can probably guess by its name, this ETF holds a range of property stocks in the form of real estate investment trusts (REITs). These pay out at least 90% of their rental profits as dividends.

Top holdings in this fund include Segro, Londonmetric Property, Land Securities, Tritax Big Box, and Primary Health Properties. The first three REITS are in the FTSE 100 while the other two are from the FTSE 250.

What I like here is that these stocks give extremely wide exposure to all sorts of property subsectors. These range from warehouses run by Amazon, datacentres, hotels, theme parks like Alton Towers, offices, healthcare (GP surgeries and local clinics), and more.

Another attractive feature is that it combines UK property stocks with UK inflation-linked government bonds. If the property market gets a bit choppy, the bond portion should act as a bit of a stabiliser.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Pound/cost averaging strategy

As mentioned, the ETF currently sports a 5.31% dividend yield. This means someone investing £10k would expect £531 back in annual income.

But what if they haven’t got this sort of money? After all, 10 grand’s hardly pocket change. Well, there’s always a pound/cost averaging strategy that could be deployed. Instead of investing a large lump sum all at once, fixed amounts would be invested at regular intervals (say, £175 every month), regardless of whether the market’s up, down, or sideways.

This strategy would smooth out the natural fluctuations. And after five years of investing £175 a month in this ETF, they’d have accumulated £10,500 worth of shares. Based on the trailing yield of 5.31%, these would then be paying around £557 in annual dividends. 

Now, I’ve simplified things for the sake of illustration here. In reality, the share price will move up and down, as will the yield. And while the dividend payout should hopefully rise over this period, nothing can be guaranteed. That’s why diversification would be important.

Also, perhaps inflation will creep back up, forcing the Bank of England to increase interest rates. In this situation, REITs would likely fall in value, putting pressure on the ETF’s share price. 

Rates are heading lower

On balance however, I think this fund’s worth considering for passive income.

With interest rates forecast to keep falling in 2026, the cost of debt for REITs will likewise head lower. With cheaper debt, property companies can start buying and developing again. This should see money start moving back into the sector, boosting the ETF’s share price in the process.

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Here are two different ETFs that I reckon are worth weighing up today for a Stocks and Shares ISA.

The AI revolution

Let’s start with the iShares AI Innovation Active ETF (LSE:IART). This fund holds 41 stocks that are central to, or benefitting from, artificial intelligence (AI) technology.

Now, AI’s a particularly hot topic right now and causing a lot of headlines. Some think we’re in an ‘AI bubble’ that might be about to pop, which, if true, would obviously be negative for this ETF’s performance.

However, what’s certain is that the big four cloud giants (Amazon, Google, Meta, and Microsoft) plan to spend upwards of $650bn in 2026, largely on AI infrastructure.

Amazon’s CEO recently said: “We’re going to invest aggressively here, and we’re going to invest to be the leader in this space [AI/cloud computing]”.

These colossal spending commitments are set to benefit many of the companies in this ETF. These include chipmakers Nvidia, Broadcom, Advanced Micro Devices (AMD), and Taiwan Semiconductor (TSMC), as well as chip equipment firms like Lam Research and Advantest.

Basically, these are the picks and shovels of the AI revolution. In other words, the companies supplying the physical equipment and infrastructure required to run AI.

Elsewhere in the ETF, there are high-quality tech names such as Meta, Snowflake, and Palantir. These are all investing heavily in AI or, in the case of Palantir, seeing their growth accelerate dramatically due to the AI boom.

The ETF’s fallen 7.5% since October, offering what I think is an attractive entry point to consider.

Passive income

Next, I want to highlight the iShares MSCI Target UK Real Estate ETF (LSE:UKRE). As the name suggests, this fund holds a number of UK real estate investment trusts (REITs), including Segro, LondonMetric Property, Tritax Big Box, and Primary Health Properties.

These REITs offer exposure to an incredibly wide range of property types, such as e-commerce warehouses, urban industrial locations, hotels, theme parks, data centres, and GP surgeries. They pay out at least 90% of their rental profits as dividends.

Better still, because the sector has sold off dramatically since 2022, they’re now offering chunky dividend yields. As such, this iShares Real Estate ETF is also offering an attractive 6.1% yield.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Now, a big risk here is that the UK economy tanks at some point. In this scenario, some tenants could be forced to downsize, impacting occupancy rates and possibly even dividends.

However, what I like here is that 39% of the ETF is in inflation-linked gilts (UK government bonds). Obviously these are much more reliable income sources than REITs, thereby offering a bit more stability.

Looking ahead, the fund should do well if interest rates keep falling and investors warm back up to REITs. The Bank of England has just signalled that further rate cuts are “likely” this year.

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Here are two such funds that I reckon are worth considering for a Stocks and Shares ISA in 2026.

Robotics revolution

Let’s start with the iShares Automation & Robotics ETF (LSE:RBTX). This one does what it says on the tin really, offering exposure to 137 stocks associated with the development of automation and robotic technology.

It’s no surprise then that we see Nvidia among the top holdings, as modern robotics is inseparable from AI, and that’s currently inseparable from Nvidia.

Take the company’s Cosmos platform, for example. It’s purpose-built for physical AI, enabling leading developers to use Nvidia’s software to accelerate the development of self-driving cars and robots. The list of customers speaks for itself.

However, the largest holding in the ETF, carrying a weighting of 5.2%, is Advantest. This Japanese company is the world leader in semiconductor automatic test equipment. Basically, before any chip is placed inside a robot, it must pass through an Advantest machine, making the firm a sort of hardware gatekeeper.

Elsewhere in the portfolio are chipmakers Intel and Advanced Micro Devices, as well as Rockwell Automation and surgical robot pioneer Intuitive Surgical. So it holds a wide range of stocks across the global robotics ecosystem.

Despite the ETF’s diverse holdings, any popping of the feared ‘AI bubble’ would likely hurt performance for a while. Meanwhile, further tit-for-tat tariffs could fuel inflation and squeeze supply chains, potentially slowing the industry’s progress.

However, with self-driving cars and robots still early in their development, I expect this one to perform well for a very long time to come.

The ETF is up more than 200% since launch in 2016, and there’s an ongoing charge of 0.4%.

UK property

Turning to a very different idea now with iShares MSCI Target UK Real Estate ETF (LSE:UKRE). This fund is invested in 28 UK real estate investment trusts (REITs), property companies, and fixed income securities.

Now, this one hasn’t performed well in recent years. Since the start of 2022, when interest rates first started shooting up, the share price has slumped by 36%.

This fall reflects the challenges higher interest rates pose for REITs, including increased debt-servicing costs and a more expensive environment for expanding property portfolios. These risks remain, which is reflected in a near-record low for the ETF’s share price.

However, the potential reward for taking on this risk is a chunky 6.5% dividend yield. And while there’s no guarantee all its underlying REITs will pay their dividends, the fund also has around 40% of the portfolio in UK inflation-linked government bonds, which provide a far more defensive income stream.

Looking ahead, interest rates are expected to keep falling next year, which would help REITs reduce the cost of their large debts. This could boost sentiment for high-quality REITs like Londonmetric Property, which makes up more than 6.5% of the ETF.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

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The result is that even smallish amounts invested each month can build up into something substantial. Here, I’ll explore how long it could realistically take someone investing £250 a month into a SIPP to build towards a £1m portfolio.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

The time frame

To keep things simple, I’ll base the maths on a basic-rate taxpayer and ignore the retirement tax side. After all, nobody really knows what the pension rules or tax rates will look like decades from now. The government may well move the goalposts.

So let’s imagine someone puts £250 a month into a SIPP. With the 20% government top-up, that contribution is boosted to £312.50. Over a year, this would add up to £3,750. 

Ignoring fees, the main variable would be the average total annual return. Again, this isn’t guaranteed, as it could be lower or higher than the long-term market average of 7%-10%. 

But if we assume 8.5%, with dividends reinvested, the pot would grow to £1m in just under 39 years. Put another way, a 30-year-old starting from scratch today might realistically build a seven-figure SIPP by retirement age by investing this amount.

Given this decades-long investing horizon, I don’t think there’s any need to swing for the fences inside a SIPP. I reckon it’s preferable to aim for a diversified portfolio of high-quality stocks, investment trusts, and exchange-traded funds (ETFs).

Slow and steady wins the race, as they say.

Resilience over time

The iShares MSCI Target UK Real Estate ETF (LSE:UKRE) could be one to consider for inclusion. It’s made up of UK real estate investment trusts (REITs), property companies, and government bonds.

The top REITs held are Segro, LondonMetric, and Land Securities, all from the FTSE 100. The first two have a lot of logistics and warehousing exposure, while Land Securities is one of the UK’s largest commercial property owners.

From the FTSE 250, it holds Unite Group, which is the UK’s largest student accommodation REIT. It earns income from domestic and international student demand.

Now, as the chart shows, the share price of this real estate ETF has done poorly since 2022. This is due to higher interest rates, which have presented challenges for property companies. Most rely on debt to expand, and this becomes more expensive when rates are high.

Meanwhile, higher bond yields make REIT dividends look less attractive by comparison. So there are risks here, especially with the UK economy struggling for growth.

However, I think now might prove to be a good time to consider investing. UK property has proven very durable across time, while the bonds help diversify the income stream (because individual dividends are never guranteed).

The ETF’s dividend yield is almost 7%, which towers above the UK market average. And with interest rates slowly but surely creeping down, I reckon the share price has a very good chance of recovering over time.

Pair this with that very attractive starting yield, and I think this ETF is a good one to consider for a SIPP.

The post How long might it take to make a million pounds in a SIPP investing £250 a month? appeared first on The Twelfth Magpie.

Here are three very different ETFs that I think are worth assessing for a Stocks and Shares ISA.

Property income

The iShares MSCI Target UK Real Estate ETF (LSE:UKRE) offers diversified property exposure without owning physical real estate. Over half of the fund is in real estate investment trusts (REITs) and property companies, with the rest in UK inflation-linked gilts (government bonds whose payments rise with inflation). Bonds helps smooth out volatility and balance risk. 

REITs held here include Segro, Land Securities, and LondonMetric Property. The latter has a £7.4bn portfolio across sectors like logistics (warehouse tenants include Tesco, Primark, and Next) and entertainment and leisure (Alton Towers and Travelodge).

Of course, a UK recession is a risk. A downturn would add challenges for the retail and hospitality sectors, while souring investor sentiment for UK property and shares. It’s worth noting that the ETF has underperformed since interest rates rose sharply in 2022.

On balance though, I think now is a good time to consider investing for the long term. The ETF is offering a bumper 7% dividend yield!

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Robotics growth

Turning to growth with the iShares Automation & Robotics ETF (LSE:RBTX). This fund is invested in 138 stocks related to the development of automatic and robotic technology.

Unlike the one above, the ETF has had a better run — up 50% in three years.

Top holdings include chipmakers Nvidia and Advanced Micro Devices, which are suppling the computing power behind AI and robotics.

On the industrial side, giants like ABB and Siemens are world leaders in factory automation. Software players like Autodesk and Snowflake are also in the top 10 holdings.

Now, this tech bias does leave the fund open to underperformance if the sector fell out of favour. Some of the top holdings are highly valued, so this adds some valuation risk.

Over the long run, however, I’m very bullish on the robotics theme, particularly self-driving cars.

The ChatGPT moment for general robotics is just around the corner.

Nvidia CEO Jensen Huang

Investing in Europe

Finally, I think the iShares Core EURO STOXX 50 ETF (LSE:EUE) is one to examine. This tracks 50 of the largest firms across the eurozone, including German software giant SAP, Banco Santander, and French luxury conglomerate LVMH (Moët Hennessy Louis Vuitton).

Also in the top 10 holdings are two very special European businesses. The first is plane maker Airbus, whose backlog is enormous thanks to surging demand for fuel-efficient jets like the A320neo family. It has been taking market share from crisis-hit US rival Boeing.

Meanwhile, ASML is the only company in the world supplying extreme ultraviolet (EUV) lithography machines. These allow chipmakers like Taiwan Semiconductor Manufacturing and Samsung to make the most advanced semiconductors.

Without ASML’s machines, there would be no iPhone processors or AI revolution. 

That said, were ASML or SAP to sell off aggressively, the ETF could suffer because this high-quality pair account for over 13% of the portfolio. So there’s a degree of concentration risk.

But given the high quality of the stocks, I expect this ETF to do well over time. There’s also a handy near-3% dividend yield on offer.

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Demand for them continues to take off, with European ETFs experiencing inflows of $30.8bn and $31.6bn in July and August, respectively. According to Invesco, this was “the strongest two-month run since February“.

Offering diversification across regions, industries, and even asset classes, these funds can cushion the impact of individual stock shocks and deliver a steady return. Here are two I think demand serious attention today.

US shares

The iShares US Equity High Income ETF (LSE:INCU) holds shares in 209 different Wall Street-listed companies. But its name is somewhat misleading, as it also generates an income from cash, as well as the BlackRock ICS US Treasury Fund, which owns government bonds.

The guaranteed returns these assets provide give the fund’s passive income flows more stability. They also reduce the fund’s exposure to stock market volatility.

I especially like this iShares ETF’s heavy weighting of information technology shares, with companies like Nvidia, Amazon, and Microsoft making up 31.6% of the entire fund. Indeed, it owns each one of the Magnificent Seven tech stocks. These companies have delivered a combined average annual return of roughly 40% over the last decade.

Of course, this tech bias can leave the fund vulnerable to economic downturns. However, it also creates substantial long-term growth potential, as phenomena like artificial intelligence (AI), cloud computing, and robotics take off.

The fund’s exposure to defensive industries like consumer goods, utilities, telecoms, and healthcare also helps provide a smooth return across the economic cycle.

For 2025, the iShares US Equity High Income ETF carries a substantial 9.7% forward dividend yield.

Property powerhouse

The iShares MSCI Target UK Real Estate (LSE:UKRE) is another top fund to consider for a large and stable second income over time.

This is because it’s loaded more specifically with real estate investment trusts (REITs). These companies receive sizeable tax breaks, such as exclusion from corporation tax. And in return they’re required to pay a minimum of 90% of yearly rental earnings out in the form of dividends.

This doesn’t necessarily guarantee a large and growing passive income. Some property stocks concentrate on cyclical sectors like industrials and retail, where occupancy and rent collection issues can be common during downturns.

But ETFs like this iShares one reduce (if not completely eliminate) such pressures by holding a variety of property stocks. In this case, the portfolio holds 29 different companies. And these range across multiple industries, like logistics, self-storage, healthcare, and student accommodation, limiting the fund’s vulnerability to adverse economic conditions.

It also holds government bonds — in this case, UK gilts — providing extra income visibility.

For this year, the iShares MSCI Target UK Real Estate’s dividend yield is an enormous 7.5%.

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ISA investors don’t have to pay a penny in tax on the dividends they receive. What’s more, unlike a Self-Invested Personal Pension (SIPP), ISA users aren’t liable to pay income tax when they withdraw their cash.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Choosing funds

It’s critical to remember that dividends are never guaranteed, as company payouts during the pandemic showed. As the Covid-19 crisis exploded, even the most reliable of passive income stocks cut, postponed or cancelled dividends entirely as earnings faltered and balance sheets deteriorated.

Yet over the long term, we’ve seen that a well-diversified portfolio can deliver a reliable stream of dividends. A portfolio whose holdings are spread across dozens of companies, industries and regions can provide a solid income across all points of the economic cycle.

Here are two top ETFs worth considering that I believe could deliver a large long-term dividend income.

1. Broad appeal

With holdings in scores of companies worldwide, the SPDR S&P Global Dividend Aristocrats UCITS ETF (LSE:GBDV) offers excellent diversification straight off the bat.

It’s designed to track the performance of high-yield global shares “that have followed a managed-dividends policy of increasing or maintaining dividends for at least 10 consecutive years“. Prioritising dividend growth reduces the erosionary impact of inflation on returns over time.

In total, this ETF has holdings in just over 100 different shares. Major holdings range from Verizon Communications and CVS Health to Universal Corp.

On the downside, half the fund (49.5%) is tied up in US shares. This means it carries greater geographical risk than more regionally spread vehicles. However, this allocation also taps into the long-term outperformance that Wall Street has enjoyed.

This SPDR ETF’s quest for dividend growth doesn’t mean that yields are sacrificed however. Its 12-month trailing dividend yield’s currently a market-beating 3.9%. During the last five years, the fund’s delivered a total average annual return of 10.5%.

2. A targeted approach

Investing in property stocks is another way to target a dependable passive income. There are many themed ETFs available to play this hand, one of which is the iShares MSCI Target UK Real Estate (LSE:UKRE).

Thanks to their consistent rental incomes, property stocks tend to enjoy consistent cash flows that support regular dividend payments. I like this particular fund because it focuses more specifically on real estate investment trusts (REITs). These investment vehicles are required to pay at least 90% of annual earnings from their rental operations out in dividends.

What’s more, the REITs it holds span multiple sectors including healthcare, retail and residential, providing an attractive balance of reward and safety. A large portion of the fund’s also dedicated to UK government bonds as well, which provides added security.

Since 2020, this iShares fund has delivered an average annual return of just 0.6%. It could continue disappointing if interest rates remain higher than normal. But with inflation dropping, I expect returns to improve strongly from this point.

The 12-month trailing dividend yield here’s a huge 6.6%.

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