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We identified the best dividend ETFs based on the most relevant investing criteria.
After reading this article, you will be more familiar with the highest-yielding and most reliable dividend ETFs.
Best Dividend ETFs: Overview
Here’s a look at the best dividend ETFs on the market:
- Vanguard Dividend Appreciation ETF (VIG)
- Vanguard High Dividend Yield Index ETF (VYM)
- iShares Core Dividend Growth ETF (DGRO)
- iShares Select Dividend ETF (DVY)
- Schwab US Dividend Equity ETF (SCHD)
- SPDR Portfolio S&P 500 High Dividend ETF (SPYD)
- Global X MLP ETF (MLPA)
- VanEck Mortgage REIT Income ETF (MORT)
- Global X SuperDividend ETF (SDIV)
Below, we study each fund’s performance, top holdings, dividend,expense ratio, and much more. Let’s get started.
Best Dividend ETFs
#1. Vanguard Dividend Appreciation ETF (VIG)
- 1-Year Performance: +12.72%
- Expense Ratio: 0.06%
- Annual Dividend Yield: 1.53%
- AUM: $64.53 billion
- 3 Month Avg. Volume: 2,120,972
- Number of Holdings: 269
- Inception Date: 2006
The Vanguard Dividend Appreciation ETF tracks an index of large-cap US equities with a record of growing their dividends year over year.
VIG’s 1.53% dividend yield puts it on the lower end of yields relative to the other funds in our list, but it’s a reliable 1.53%.
Some of the best dividend stocks contribute to that yield, such as UnitedHealth Group, Johnson & Johnson, and Microsoft.
Remember, this dividend ETF consists of companies that grow their dividends annually. In our estimation, this results in a stable and reliable source of income.
VIG Top Holdings:
- Microsoft (MSFT) 4.83%
- UnitedHealth Group (UNH) 3.77%
- Johnson & Johnson (JNJ) 3.58%
- Home Depot (HD) 3.48%
- JPMorgan Chase & Co. (JPM) 3.32%
#2. Vanguard High Dividend Yield Index ETF (VYM)
- 1-Year Performance: +16.17%
- Expense Ratio: 0.06%
- Annual Dividend Yield: 2.69%
- AUM: $43.35 billion
- 3 Month Avg. Volume: 2,141,858
- Number of Holdings: 413
- Inception Date: 2006
The Vanguard High Dividend Yield Index ETF invests in large-cap equities that are forecasted to have above-average dividend yields.
VYM is not concerned with a company growing its dividend – just that it has a high dividend today.
This results in holding more value stocks from traditionally value-oriented industries, such as Financials and Consumer Staples.
As expected, VYM pays out a higher dividend yield than the previous fund, the Vanguard Dividend Appreciation ETF (VIG).
VYM Top Holdings:
- JPMorgan Chase & Co (JPM) 3.30%
- Johnson & Johnson (JNJ) 3.19%
- Home Depot (HD) 3.13%
- Procter & Gamble (PG) 2.79%
- Pfizer (PFE) 2.34%
#3. iShares Core Dividend Growth ETF (DGRO)
- 1-Year Performance: +15.63%
- Expense Ratio: 0.08%
- Annual Dividend Yield: 1.94%
- AUM: $22.90 billion
- 3 Month Avg. Volume: 2,124,464
- Number of Holdings: 420
- Inception Date: 2014
The iShares Core Dividend Growth ETF has a similar strategy as the Vanguard Dividend Appreciation ETF: offer low-cost exposure to U.S. stocks focused on dividend growth.
However, this ETF invests in a wider variety of industries, specifically the Technology sector.
DGRO’s top holdings include tech stocks like Apple, and Microsoft, in addition to semiconductor stocks like Broadcom and Intel.
Tech as the top sector for a dividend ETF may feel odd, but these companies are growing their dividends and meeting the fund’s requirements.
DGRO Top Holdings:
- Johnson & Johnson (JNJ) 2.87%
- Apple (AAPL) 2.79%
- JPMorgan Chase & Co (JPM) 2.72%
- Procter & Gamble (PG) 2.71%
- Pfizer (PFE) 2.70%
#4. iShares Select Dividend ETF (DVY)
- 1-Year Performance: +19.48%
- Expense Ratio: 0.39%
- Annual Dividend Yield: 3.16%
- AUM: $20.66 billion
- 3 Month Avg. Volume: 1,090,173
- Number of Holdings: 104
- Inception Date: 2003
The iShares Select Dividend ETF provides exposure to broad-cap U.S. companies with a consistent history of dividends.
The 104 holdings in DVY have a 5-year record of paying dividends.
This includes some of the more traditional dividend-paying companies in the Energy and tobacco industries.
For example, the top holding in DVY is the natural gas company ONEOK, which has an annual dividend yield of 5.92%
ONEOK is followed by another legacy company in the oil and gas industry, Exxon Mobil, which pays a 4.45% annual dividend yield.
Tobacco giants Altria and Phillip Morris are next, which pay 7.15% and 4.52%, respectively.
These traditional dividend stocks contribute to the DVY’s high dividend yield of 3.16%.
DVY Top Holdings:
- ONEOK (OKE) 2.71%
- Exxon Mobil (XOM) 2.30%
- Altria Group (MO) 2.28%
- Philip Morris International (PM) 1.96%
- Prudential Financial (PRU) 1.89%
#5. Schwab US Dividend Equity ETF (SCHD)
- 1-Year Performance: +15.84%
- Expense Ratio: 0.06%
- Annual Dividend Yield: 2.83%
- AUM: $34.08 billion
- 3 Month Avg. Volume: 2,877,780
- Number of Holdings: 103
- Inception Date: 2011
The Schwab U.S. Dividend Equity ETF generally invests in stocks included in the Dow Jones U.S. Dividend 100 Index, which consists of companies that have a record of consistently paying dividends.
This fund is agnostic to industry and dividend growth.
We view SCHA as a mix between the Vanguard High Dividend Yield Index ETF (VYM) and the iShares Core Dividend Growth ETF (DGRO).
It reminds us of VYM because it is not concerned about dividend growth and DGRO because of its large allocation to the Tech sector.
SCHD Top Holdings:
- Coca-Cola Company (KO) 4.39%
- Amgen (AMGN) 4.28%
- Verizon Communications (VZ) 4.23%
- Merck & Co. (MRK) 4.19%
- PepsiCo (PEP) 4.05%
#6. SPDR Portfolio S&P 500 High Dividend ETF (SPYD)
- 1-Year Performance: +19.02%
- Expense Ratio: 0.07%
- Annual Dividend Yield: 3.58%
- AUM: $6.02 billion
- 3 Month Avg. Volume: 1,808,366
- Number of Holdings: 81
- Inception Date: 2015
The SPDR Portfolio S&P 500 High Dividend ETF replicates the performance of the top 80 high dividend-yielding companies within the S&P 500 Index.
SPYD is one of the most popular high-yielding funds that you can buy.
Its current yield is well below its average over the past five years, down to 3.58% from its average of 4.63%, but it remains on the higher-yielding end of dividend ETFs.
It consists mostly of blue-chip stocks; all included in the illustrious S&P 500 Index.
SPYD Top Holdings:
- Valero Energy Corporation (VLO) 1.43%
- Marathon Petroleum Corporation (MPC) 1.41%
- Organon & Co. (OGN) 1.39%
- EOG Resources (EOG) 1.39%
- Phillips 66 (PSX) 1.38%
#7. Global X MLP ETF (MLPA)
- 1-Year Performance: +28.54%
- Expense Ratio: 0.46%
- Annual Dividend Yield: 8.22%
- AUM: $1.13 billion
- 3 Month Avg. Volume: 332,622
- Number of Holdings: 21
- Inception Date: 2012
The Global X MLP ETF invests in midstream pipelines and storage facilities with less sensitivity to energy prices.
The 21 holdings in MLPA operate in just three industries: Storage and Transportation – Petroleum (49%), Gathering and Processing (27%), and Storage and Transportation – Natural Gas (25%).
The holdings in this ETF are structured as master limited partnerships (MLPs), which are publicly traded partnerships that combine the tax benefits of a partnership with the liquidity of publicly traded securities.
MLPs can pay high yields to investors because they do not pay corporate income taxes.
Typically, MLP ETFs have exceptionally high expense ratios.
While the 0.46% fee from the Global X MLP ETF is nothing to scoff at, it’s relatively low-cost compared to other funds of this type.
MLPA Top Holdings:
- Enterprise Products Partners (EPD) 10.02%
- Energy Transfer (ET) 9.29%
- Magellan Midstream Partners (MMP) 7.25%
- MPLX (MPLX) 7.09%
- BP Midstream Partners (BPMP) 6.39%
#8. VanEck Mortgage REIT Income ETF (MORT)
- 1-Year Performance: -5.83%
- Expense Ratio: 0.40%
- Annual Dividend Yield: 8.57%
- AUM: $278 million
- 3 Month Avg. Volume: 139,497
- Number of Holdings: 21
- Inception Date: 2011
The VanEck Mortgage REIT Income ETF seeks to track the overall performance of U.S. mortgage real estate investment trusts.
REITs are an effective way to gain access to real estate without buying an actual house or piece of property.
The VanEck Mortgage REIT Income ETF holdings primarily invest in residential and commercial assets.
The 8.57% dividend yield is the second highest yield of any ETF on our list.
However, MORT also has the second-worst 1-year trailing performance of any ETF on our list.
MORT Top Holdings:
- Annaly Capital Management (NLY) 12.62%
- AGNC investment Corp. (AGNC) 8.60%
- Starwood Property Trust (STWD) 8.37%
- Blackstone Mortgage Trust (BXMT) 6.21%
- New Residential Investment Corp. (NRZ) 5.18%
#9. Global X SuperDividend ETF (SDIV)
- 1-Year Performance: -8.49%
- Expense Ratio: 0.59%
- Annual Dividend Yield: 9.03%
- AUM: $938 million
- 3 Month Avg. Volume: 594,034
- Number of Holdings: 101
- Inception Date: 2011
The Global X SuperDividend ETF provides access to 100 of the highest dividend-paying equities worldwide.
It has the highest paying dividend yield of any fund in this article.
SDIV makes distributions every month and has done so each month for over a decade.
The fund consists mostly of Mortgage REITs, Real Estate assets, and Financial equities.
It also chases yield all around the globe, with 31% of the fund invested in the United States, 15% in China, and 14% in Hong Kong.
Global X has another dividend fund called the Global X SuperDividend U.S. ETF (DIV), which invests in 50 of the highest paying dividend equities in the United States.
While less than SDIV’s yield, DIV pays out a remarkably high yield of 5.27%.
SDIV Top Holdings:
- Transmissora Alianca De Energia (TAEE11:BSP) 1.54%
- NOS SGPS (NOS: LIS) 1.52%
- British American Tobacco (BATS: LON) 1.48%
- Imperial Brands (IMB: LON) 1.44%
- Williams Companies (WMB) 1.43%
Alternatives to the Best Dividend ETFs
Here are some alternatives to the best dividend ETFs:
- SPDR S&P Dividend ETF (SDY)
- ProShares S&P 500 Dividend Aristocrats ETF (NOBL)
- iShares Core High Dividend ETF (HDV)
- iShares International Select Dividend ETF (IDV)
- Vanguard International High Dividend Yield ETF (VYMI)
You may also want to consider sector-specific ETFs that tend to have higher yields, such as Energy ETFs, Real Estate ETFs, and Bank ETFs.
Best Dividend ETFs: FAQs
What ETF pays the highest dividend?
The Global X MLP ETF (MLPA) and Global X NASDAQ 100 Covered Call ETF (QYLD) pay some of the highest dividends you will find. The VanEck Mortgage REIT Income ETF (MORT) pays an annual dividend yield above 8.00%.
Are dividend ETFs worth it?
Dividend ETFs are worth it if you’re seeking diversified exposure to dividend-paying companies. Dividend ETFs such as the Vanguard Dividend Appreciation ETF (VIG), the Vanguard High Dividend Yield Index ETF (VYM), and the SPDR Portfolio S&P 500 High Dividend ETF (SPYD) can serve as promising investment options.
Which ETFs have monthly dividends?
The three best ETFs that have monthly dividends are the Global X SuperDividend ETF (SDIV), the Invesco Preferred ETF (PGX), and the iShares Preferred and Income Securities ETF (PFF).
Bottom Line: Best Dividend ETFs
There are trade-offs to each of these dividend ETFs, but you should now have the information to invest in the one that best aligns with your goals.
Keep Reading:
This article is for informational purposes only, and it is not intended to be investment advice. Read our editorial guidelines and public equities research methodology to learn more about how we selected the best dividend ETFs.
