A diversified portfolio balances the need for growth along with the need for stability. After all, small-cap biotech stocks and software startups may deliver a big payday if all goes well, but they can go right to zero if things go poorly. Only those investors who are willing to risk ruin would put all their cash into bets like these without a firm foundation to rely on.
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Dividend stocks are among the most stable investments on Wall Street because a firm has to have regular and reliable profits to pay out regular and reliable dividends. That cash isn’t aggressively reinvested into growth, however. Instead, it is delivered directly to shareholders — providing a sweetener in the total return of an investment as well as a stream of income that can be relied on without selling a single share.
The following dividend exchange-traded funds all offer different ways to tap into income-oriented strategies:
| Dividend ETF | Assets Under Management | Expense Ratio | Trailing Dividend Yield* |
| Vanguard Dividend Appreciation ETF (ticker: VIG) | $85 billion | 0.06% | 1.7% |
| Schwab US Dividend Equity ETF (SCHD) | $60.6 billion | 0.06% | 3.4% |
| Vanguard High Dividend Yield ETF (VYM) | $58.2 billion | 0.06% | 2.8% |
| ProShares S&P 500 Aristocrats (NOBL) | $12.5 billion | 0.35% | 2.0% |
| Capital Group Dividend Value ETF (CGDV) | $10.4 billion | 0.33% | 1.4% |
| Global X SuperDividend ETF (SDIV) | $794 million | 0.58% | 10.7% |
| iShares International Select Dividend ETF (IDV) | $4.3 billion | 0.49% | 6.2% |
*As of Sept. 11 close.
Vanguard Dividend Appreciation ETF (VIG)
Assets under management: $85 billion Expense ratio: 0.06%, or $6 per year on every $10,000 invested Dividend yield: 1.7%
One of the 15 largest U.S. ETFs by assets and the largest dividend-focused fund out there, this leading Vanguard ETF is the go-to option for investors who want a liquid and established way to invest in stocks for income via one single holding. It’s not particularly generous from a yield perspective, at just under 2% in annual payout, but that’s in part because this dividend ETF is focused on the largest stocks instead of the largest dividends.
For instance, trillion-dollar tech giants Microsoft Corp. (MSFT) and Apple Inc. (AAPL) are among the top three holdings and represent about 9% of total assets, but each offers a current dividend yield of less than 1%. There are about 340 large companies that make up this fund, and they all have very stable payouts — so even if the yield is not huge, the stability offered by VIG makes it a popular option.
Schwab US Dividend Equity ETF (SCHD)
Assets under management: $60.6 billion Expense ratio: 0.06% Dividend yield: 3.4%
Another massive and popular fund, this Schwab dividend ETF offers a significantly higher dividend through a more selective list of about 100 blue-chip stocks. Top holdings include defense giant Lockheed Martin Corp. (LMT), AbbVie Inc. (ABBV) and Coca-Cola Co. (KO). With mega-cap tech stocks dominating the prior fund, the absence of Silicon Valley giants on that list is noteworthy. In fact, the technology sector only makes up around 10% of the portfolio, while leading sectors include financial services (18%), followed by health care (16%) and consumer defensive (15%). This focus on more income-oriented sectors helps lift the overall yield of SCHD.
[READ: 8 Top-Rated Income Funds to Buy in 2024]
Vanguard High Dividend Yield ETF (VYM)
Assets under management: $58.2 billion Expense ratio: 0.06% Dividend yield: 2.8%
Splitting the difference is VYM, a fund that also has $50 billion in assets and ranks among the most popular dividend ETFs on Wall Street. The portfolio is larger than the prior two picks, with about 500 total positions that span the dividend stocks that make up the prior funds, along with a bunch more mid-sized payers that help fill out the portfolio and lift the overall yield to nearly two times that of the S&P 500. Mega-cap favorites lead the list of holdings, with chipmaker Broadcom Inc. (AVGO), JPMorgan Chase & Co. (JPM) and Big Oil icon Exxon Mobil Corp.(XOM) in the top three spots.
ProShares S&P 500 Aristocrats (NOBL)
Assets under management: $12.5 billion Expense ratio: 0.35% Dividend yield: 2%
Though considerably smaller than the other funds listed so far, NOBL is still quite established. It’s also much more tactical, as it focuses on Wall Street’s Dividend Aristocrats. There are only 67 companies in this family of stocks, and each has increased its payouts for at least 25 consecutive years. That’s an impressive track record on paper, but even more meaningful when you consider the last 25 years have included market meltdowns such as the COVID-19 pandemic, the 2008 global financial crisis and the dot-com bubble of 2000.
The overall yield may not blow the doors off, and the stocks on this list include unsung firms like logistics leader C.H. Robinson Worldwide Inc. (CHRW) and midsize insurance stock Cincinnati Financial Corp. (CINF). But when it comes to a history of raising dividends, this selective list is the gold standard for many investors.
Capital Group Dividend Value ETF (CGDV)
Assets under management: $10.4 billion Expense ratio: 0.33% Dividend yield: 1.4%
A boutique dividend ETF, this actively managed fund by Capital Group seeks out value-oriented opportunities wherever it can find them — including in stocks that may not pay a dividend yet but are likely to in the near future. The annualized yield of this fund is 1.9%, but more importantly, the year-to-date return of 16% tops the S&P 500’s returns since Jan. 1 to prove that income investors don’t have to choose between share appreciation or dividend payouts.
The fund’s success relies on the choices made by its managers. Right now those include a big bias toward industrials like aerospace firm RTX Corp. (RTX) and HVAC specialist Carrier Global Corp. (CARR). Past performance isn’t an indicator of future returns, but recent momentum shows that CGDV is doing something right in 2024.
Global X SuperDividend ETF (SDIV)
Assets under management: $794 million Expense ratio: 0.58% Dividend yield: 10.7%
Perhaps the most risky and volatile fund on this list, SDIV seeks big payouts wherever it can find them — including a heavy focus on real estate stocks and international investments to create a double-digit dividend yield. This Global X fund is diversified in a way, as it holds a basket of stocks like any ETF. However, roughly 41% of the 100 or so of the stocks in its portfolio are in the real estate sector. Furthermore, only about 36% of total holdings are in U.S. companies, as Hong Kong and the U.K. come in roughly tied for second place with 8% allocations in each region.
SDIV is good for aggressive investors who want a high-dividend ETF and don’t really care what corner of the stock market they find that income potential. But keep in mind that the yield isn’t the only thing to watch — particularly as this dividend ETF has drifted slightly lower since Jan. 1, while more conventional large-cap funds have moved higher.
iShares International Select Dividend ETF (IDV)
Assets under management: $4.3 billion Expense ratio: 0.49% Dividend yield: 6.2%
Another unique dividend ETF to consider, IDV looks outside of the U.S. and is built exclusively on international companies that pay back shareholders. These distributions are typically much bigger than domestic companies given a cultural bias toward dividends in a lot of foreign nations. Buying overseas dividend payers isn’t always easy, as these stocks are not always listed on U.S. exchanges, can be more of a challenge to research, and often pay irregular dividends that vary in size and frequency. But this Vanguard dividend ETF solves all that with a simple 100-stock portfolio you can purchase via a single position.
Top holdings include French energy giant TotalEnergies SE (TTE), British American Tobacco PLC (BTI) and the U.K.’s Vodafone Group PLC (VOD). Large-cap stocks like these behave like popular U.S. blue chips, and they offer a great way to access high-dividend investments that can pay more than the typical S&P 500 component.
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Update 09/12/24: This story was previously published at an earlier date and has been updated with new information.
