Investopedia: 8 Great ETFs For Income And Diversification

There is a curious conundrum for many income-oriented investors. Income investing is a generally conservative approach, but it can be difficult to find a cost-effective way to obtain a level of diversification that minimizes single-stock risk. Although there are all manner of stocks, bonds, preferred stocks and funds that can offer investors solid yields, investors may want to consider ETF-based income options as a way of securing both income and diversification in a cost-effective way. 

A Quick Run-Down on ETFs  
ETFs can be thought of as a hybrid investment vehicle that blends together aspects of mutual funds and closed-end funds. Like closed-end funds, ETFs trade continuously on exchanges throughout the day and the price is updated continually. ETFs can also be bought on margin and held in a variety of retirement accounts. Unlike closed-end funds, ETFs seldom trade at a significant premium or discount to the fund's net asset value (NAV), they are less vulnerable to style drift, and they often have a lower expense ratio as well.

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