Want decades of passive income? 2 Top ETFs to Buy Now and Hold Forever

Exchange-traded funds (ETFs) can make it easy for you to build multiple streams of passive income. Choose wisely and you can set yourself up for excellent long-term returns boosted by generous cash dividends. Here are two top ETFs that will grow their investors’ wealth in the coming years.

A solid core

The Schwab US Dividend Equity ETF (SHD 0.80%) it can be a staple of your investment portfolio. The fund tracks an index that prioritizes financially strong businesses with sustainable cash payouts.

The Schwab US Dividend Equity ETF holds shares in more than 100 companies. These are profitable, high-quality businesses with average returns on equity of over 28%. They are also mostly larger businesses, with a weighted average market value of about $130 billion.

Here are some of the fund’s largest holdings, along with the percentages of its assets they comprise:

1. Lockheed Martin4.46%
2. AbbVie4.43%
3. Home Depot4.21%
4. BlackRock4.16%
5. Coca cola4.12%

These industry leaders have a long history of rewarding their shareholders with steadily growing cash dividends. They are representative of the type of strong, competitively-advantaged companies found in the Schwab US Dividend Equity ETF portfolio.

Income-focused investors will also appreciate the ETF’s 3.6% dividend yield. This is almost three times the return of the broad market S&P 500 index. Moreover, value-focused investors will like the fund’s price-to-earnings (P/E) ratio of about 17, which is considerably lower than the S&P 500’s P/E of more than 24.

Better yet, the Schwab US Dividend Equity ETF has a low expense ratio of just 0.06%. That’s just $0.60 per $1,000 invested annually. Lower fees mean you’ll be able to keep almost all of the fund’s dividend profits, which are likely to be substantial in the coming years. This high-performing ETF has provided investors with annualized returns of over 13% since its inception in 2011.

Global earnings

If you also want to position your portfolio to take advantage of the success of companies based outside the US — while reducing risk by increasing diversification — consider ETF Vanguard International High Dividend Yield (YUMMY 0.08%). This passive, income-generating fund currently produces a strong yield of 4.5%.

The Vanguard ETF can boost your returns by giving you a strong element of global growth. Buying shares in the fund is an easy way to invest in over 1,500 international stocks.

Key markets include Japan, the United Kingdom, Switzerland, Canada, Australia and China. Car titanium Toyotathe energy giant Shellfood conglomerate Nestorand financial services leaders Royal Bank of Canada and Commonwealth Bank of Australia are among the fund’s largest holdings.

What’s more, this international dividend stock ETF has a relatively low expense ratio of 0.22%. That’s favorable to many comparable funds, which have expense ratios of 0.96% on average, according to the data Morningstar.

The Vanguard International High Dividend Yield ETF thus matches well with the Schwab US Dividend Equity ETF. Investing in both funds will earn you passive income fueled by long-term growth in the global economy.