Did you know that on Dec. 31, 1978, the S&P 500 paid a dividend yield as high as 5.3%?
Many younger investors have never experienced an environment like that, but for older generations, it was once common for equity income to meaningfully exceed today’s levels.
That said, the macroeconomic backdrop was atypical. Inflation at the time was running above 7%, well above the Federal Reserve’s long-term 2% target, and it wasn’t brought under control until former Fed Chair Paul Volcker raised interest rates into the double digits, triggering a recession.
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Today, the picture looks very different. As of April 22, the S&P 500’s trailing-12-month dividend yield sits at just 1.1%. Part of that decline comes down to math.
Yield is calculated as dividends per share divided by share price, so as stock prices rise, yields fall. With the S&P 500 repeatedly hitting new highs, the denominator has grown faster than the numerator.
The other factor is how companies allocate capital today. Rather than steadily increasing dividend payouts, many firms prefer to do share buybacks or reinvest profits into growth and acquisitions. This is especially true in a market increasingly dominated by technology stocks.
For example, the iShares Core S&P 500 ETF (ticker: IVV) holds over a third of its weight in technology, including the “Magnificent Seven” stocks. These companies are collectively investing hundreds of billions in artificial intelligence and data center infrastructure instead of prioritizing dividends.
As a result, income-focused investors may find the S&P 500 less appealing as a core holding. One alternative is high-dividend exchange-traded funds, or ETFs, which target stocks with above-average yields.
These can be passive index-based strategies that screen for dividend-paying companies, or actively managed portfolios that pick dividend stocks based on fundamentals. In either case, they can provide a way to generate higher income or gain exposure to companies trading at more reasonable valuations.
Here are seven of the best high-dividend ETFs to buy today:
| ETF | Expense Ratio | 30-day SEC yield |
| Vanguard High Dividend Yield ETF (VYM) | 0.04% | 2.4% |
| SPDR Portfolio S&P 500 High Dividend ETF (SPYD) | 0.07% | 4.5% |
| Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) | 0.30% | 4.7% |
| VanEck Durable High Dividend ETF (DURA) | 0.30% | 2.8% |
| iShares Core High Dividend ETF (HDV) | 0.08% | 3.0% |
| WisdomTree U.S. High Dividend Fund (DHS) | 0.38% | 3.6% |
| Schwab U.S. Dividend Equity ETF (SCHD) | 0.06% | 3.3% |
Vanguard High Dividend Yield ETF (VYM)
“Vanguard’s high-dividend ETFs are built on transparent, rules-based indexes designed to provide higher income while managing risk,” says Kathy Kellert, head of index equity product at Vanguard. “ETFs like VYM don’t explicitly target value stocks, but instead screen for higher-yielding stocks and weight them by market cap.” This ETF currently pays a 2.4% 30-day SEC yield after deducting a 0.04% expense ratio.
“These indexes naturally tilt toward larger, more established companies rather than distressed high-yield names,” Kellert explains. “For investors, the result is a disciplined, broadly diversified approach to accessing higher dividend income.” VYM’s portfolio trades at a lower 21.7 price-to-earnings ratio compared to the market, while maintaining strong quality with an average 18% return on equity.
SPDR Portfolio S&P 500 High Dividend ETF (SPYD)
SPYD selects the 80 highest-yielding dividend stocks from the S&P 500 and weights them equally, resulting in an above-average 4.5% 30-day SEC yield. This index methodology significantly reduces exposure to technology stocks, which make up just 2.5% of the portfolio. The ETF has attracted more than $7.2 billion in assets under management, helped in part by its low 0.07% expense ratio.
“Recent returns also showcase the embedded style bias of SPYD,” says Matthew Bartolini, managing director and global head of research strategists at State Street Investment Management. “As a dividend strategy, SPYD carries a value-oriented tilt and is up 6.4% year-to-date, driven by heightened sector exposure in real estate, energy and utilities stocks relative to the technology-heavy S&P 500 index.”
Invesco S&P 500 High Dividend Low Volatility ETF (SPHD)
SPHD builds on a similar foundation as SPYD but adds another layer of screening. Rather than selecting stocks based on yield alone, this ETF also applies a low-volatility filter to reduce risk. Specifically, it targets the 50 S&P 500 stocks with both the highest dividend yields and the lowest trailing-12-month volatility, while also applying caps on sector and individual stock concentration.
“SPHD’s low-volatility filter helps avoid ‘dividend traps,’ where high yields may signal financial stress,” explains Nick Kalivas, head of factor and core equity product strategy at Invesco. It currently pays a 4.7% 30-day SEC yield after accounting for a 0.3% expense ratio. Unlike SPYD, which distributes income quarterly, SPHD pays dividends on a monthly basis. The ETF has returned 4.4% this year through April 22 on a total return basis.
VanEck Durable High Dividend ETF (DURA)
“DURA tracks the Morningstar U.S. Dividend Valuation Index, which applies a multi-step screening process rooted in Morningstar’s equity research,” explains Coulter Regal, product manager at VanEck. “Eligible companies must first rank in the top half by trailing yield, and from there, the index screens for financial health using Morningstar’s ‘Distance to Default’ model and incorporates fair value estimates.”
After deducting a 0.3% expense ratio, DURA’s portfolio of 70 stocks currently pays a 2.8% 30-day SEC yield. “The result is a portfolio that does not simply chase yield, but systematically filters for companies whose dividends are supported by balance sheet durability and whose shares are trading at attractive prices,” Coulter says. Year to date, DURA has outperformed, at 9% on a total return basis.
[Read: 7 Best Income ETFs to Buy in 2026]
iShares Core High Dividend ETF (HDV)
Similar to DURA, HDV also tracks a Morningstar dividend-focused index, using a more layered screening process than simple high-yield strategies. In addition to a balance sheet-based “distance-to-default” score, HDV’s benchmark applies an “economic moat rating” that evaluates competitive advantages, along with an “uncertainty rating” that adjusts for the reliability of analyst forecasts.
The ETF holds a concentrated portfolio of 75 stocks, weighted by the cash dividends paid over the trailing year. This approach can lead to higher turnover when the index reconstitutes, as companies move in and out based on changing fundamentals. The portfolio is currently tilted toward consumer staples, energy and health care. HDV charges a 0.08% expense ratio and delivers a 3% 30-day SEC yield.
WisdomTree U.S. High Dividend Fund (DHS)
Many dividend strategies use fundamental weighting instead of market-cap weighting. Rather than assigning weights based on size, these indexes use metrics that are believed by academics to potentially deliver outperformance. DHS is a good example. It tracks the WisdomTree U.S. Dividend Index, which weights stocks based on the total cash dividends each company is expected to pay, not their yield.
That base weighting is then adjusted using a composite risk score based on value, quality and momentum factors. Companies that score well receive higher weights, while weaker names are scaled down. According to WisdomTree, the portfolio trades at a modest 15.9 times earnings, and after a 0.38% expense ratio, currently pays a 3.6% 30-day SEC yield with monthly distributions.
Schwab U.S. Dividend Equity ETF (SCHD)
On the surface, SCHD looks like a plain-vanilla, high-dividend ETF, offering a 3.3% 30-day SEC yield at a low 0.06% expense ratio. But the appeal runs deeper once you look at its underlying benchmark, the Dow Jones U.S. Dividend 100 Index. The process starts by screening for companies with at least 10 consecutive years of dividend payments, which helps filter for consistency and durability.
From there, it applies a composite ranking system that assesses free cash flow to total debt, return on equity, dividend yield and five-year dividend growth rate. It then selects the top 100 stocks that pass these checks. The index is rebalanced quarterly, with a full reconstitution each year designed to add new eligible companies and remove those that no longer meet SCHD’s index criteria.
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7 Best High-Dividend ETFs to Buy for 2026 originally appeared on usnews.com
Update 04/23/26: This story was published at an earlier date and has been updated with new information.
