The following six Exchange Traded Funds (ETFs) are currently the largest dividend-focused ETFs on the market. These funds are low-cost providing more diversified approach to dividend investing for dividend investors.
- Vanguard Dividend Appreciation (VIG). Focuses on companies with a history of increasing dividends over time. Tracks the S&P U.S. Dividend Growers Index. Leans towards large-cap stocks known for stability and dividend growth. Lower current dividend yield compared to some on this list, but targets sustainability through growth.
- Vanguard High Dividend Yield (VYM). Aims for companies with currently high dividend yields. Tracks the FTSE High Dividend Yield Index. May include a mix of company sizes with a focus on higher immediate income. Higher current dividend yield but might have some fluctuations depending on the holdings.
- Schwab US Dividend Equity (SCHD). Similar to VIG, focuses on companies with a history of increasing dividends. Tracks its own proprietary index, focusing on fundamentals like profitability and payout ratios. Primarily invests in large-cap stocks. Offers a balance between current yield and dividend growth potential.
- iShares Core Dividend Growth (DGRO). Invests in companies with a combination of high dividend yields and dividend growth potential. Tracks the Dow Jones US Select Dividend Growth Index. May include a wider range of company sizes compared to some on this list. Targets a balance between income and long-term growth through dividends.
- SPDR S&P Dividend (SDY). Tracks the S&P High Dividend Yield Index. Similar to VYM, focuses on companies with high current dividend yields. May include a mix of company sizes with a focus on income generation. Offers a higher current yield but might have some fluctuations depending on the holdings.
- iShares Select Dividend (DVY). Actively managed fund that selects companies based on various factors, including dividend history and sustainability. Offers more flexibility than index-tracking funds but comes with a higher expense ratio. May include a wider range of company sizes and sectors.
These dividend-focused ETFs are a great way for investors to gain exposure to companies that have a history of paying dividends. They offer a diversified way to invest in dividend-paying stocks and can provide investors with a steady stream of income.
It is important to do your own research before investing in any ETF. Consider your investment goals, risk tolerance, and desired income stream when making your decision.
