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@Ron. The favorite ETF's on this forum are STXIND and DIVTRX. (so far that I see).
The STXIND has the top 25 Co's and weighted by market capitalization.
The DIVTRX has about the same number of Co's but the management chooses Co's that keep increasing their dividends.
Co's that keep increasing their dividends are normally the ones that are growing from strength to strength and have good fundamentals and management.
I will post some charts here for comparison. Although my favorite one is DIVTRX, it is only a year and a half old and STXIND is skewed by the developments with SAB that has a heavy weighting in it.

Thanks Orca. I have a R130G position in DIVTRX after reading about it here. They've recently increased their holdings with the rebalancing & a number of "iffy" shares have entered (mining shares over 8%) which I'm not too pleased about but that's how the cookie crumbles. But I agree with the approach and that's ultimately how to evaluate an ETF.

I was briefly in the INDI & got out when I read somewhere that if it was a stock market it would be the most expensive in the world. Well, it's expensive for a reason - its constituents are absolute winners and, crucially, have international operations. Still, I wonder if it wouldn't be better to split/replace an investment in this ETF with a successful, moderately aggressive fund manager like 36One? If you believe a correction / bear market is not far away, high growth stocks will fall further & you probably want a brain to handle the fallout better. In a bull market ETFs outperform most fund managers, but in a bear market the pros have an upper hand. Just a thought.

I think it's a fair point that you could use capital gains to your advantage. I must also add, just because you set up a dividend based portfolio, doesn't mean you do not get any growth. Many of my shares, bought for the dividend, have done very well - CPI, Hyprop, PGR, BTI, Rockcastle, Redefine inter all for me have grown between 50 - 200% in under 3 years. And property as a class out performed equities again - has done a few times over the last 5 years.

I think the idea is to find a system that you comfortable with - but now matter what you do, it will be some sort of hybrid.

I have both the INDI and Divtrx in my TFSA - Like the higher div, the company mix and the fact that the mix is relatively evenally allocated in the DIVtrx. I own many of the shares in the divtrx in my portfolio, because besides initial yield, they chosen also for there ability to grow their dividend - I think it's a good sign if a company can grow their dividend yearly.

When you set up your portfolio for dividends, do you also look at exposure - RSA vs Outside RSA.

For me that was important - have around 25% of my portfolio reporting (and giving dividends!) in dollars/pence/euros. so fairly well hedged when you think that many of the other SA companies will also have and overseas element.

Dividend taxes are steep but you should remember you don't pay Div taxes on REITs. All dividends you earn from REITs are taxed on your income instead and since you do not work and it is your only come your taxes wouldn't be so high.

If you bored, here is what I bought: of course, there was a bit of buying and selling as well - some good selling (Kumba) and some not so good (steinhoff, bought at R25 sold at R23) - live and learn hey! 1st share bought was Redefine Inter  in Jan 2013 - so still a couple of months before I can claim CGT! But in the three years money in would be broken down - Thumbsucking now, but around 30%/60%/10% - dividends have been taken out for the last two years.

Share   Code   Profit (Loss) (%)   % of Equities
ACCPROP   APF   -1.05   2.15%
A V I   AVI   40.47   5.54%
ARROW A   AWA   28.23   4.02%
BATS   BTI   68.96   2.58%
CORONAT   CML   -5.68   7.08%
CAPITEC   CPI   211.44   6.87%
DELAFRICA   DLA   -2.19   1.18%
FAIRVEST   FVT   -0.2   2.16%
GRANPRADE   GPL   3.15   1.12%
GROWPNT   GRT   10.29   2.53%
HYPROP   HYP   49.1   8.54%
INTUPLC   ITU   38.9   3.50%
MMI HLDGS   MMI   16.45   1.47%
MR PRICE   MRP   31.52   6.30%
MTN GROUP   MTN   -27.64   3.18% 
NEPI   NEP   21.02   1.85%
OLDMUTUAL   OML   38.67   3.92%
PERGRIN   PGR   55.19   2.60%
REDEFINE   RDF   25.09   2.74%
RHODES   RFG   30.6   2.22%
RMIH   RMI   39.59   3.06%
ROCKCASTLE   ROC   62.87   4.28%
RI PLC   RPL   53.94   5.77%
SA CORP   SAC   29.15   2.65%
SAFARI   SAR   -9.85   1.89%
SANLAM   SLM   0.52   1.62%
SPURCORP   SUR   7.62   0.63%
TASTE   TAS   -35.33   1.13%
TEXTON   TEX   -10.41   2.04%
TOWER   TWR   -7.87   1.09%
VODACOM   VOD   19.87   3.23%


Should add - excluding last two year dividends, up 28.5% (was over 35%) - if we call it over two years, it's alright,not shooting the lights out though -  do get 34% if I include the dividends taken though, which is more inline with the market.

BTW - I track my dividends on what I originally paid for them - not the current cost. My financial year start Sep to end of August - just they way it worked out. Some of the good ones from last year.

Growthpoint - 8.94%, Redefine 8.14, Red inter, 6.72, SACorp 8.85%, Arrowhead 9.21, CML 7.51, PGR 7.54, AVI 8.4, MMI 9.12, MTN 5.78, VOD 9.2

And I have no problem buying lot's of shares - I am certainly not a good enough stock picker to always pick winners - besides, I like to spread my risk and I enjoy reading sens and I would be more than happy if my portfolio kept up within spitting distance of the market. I doubt I will ever beat it. I do beat it on dividend yield though.

You probably more likely to get mugged/assaulted in the UK, more likely to be murdered in SA and 50/50% when it comes down to theft - from houses or cars.

*******Thumb sucking stats courtesy of me having lived there for 10 years - so a bona fide expert in the field...