Highest US listed Dividend Paying ETFs
An ETF, or exchange-traded fund, is a type of investment vehicle that is similar to a mutual fund, but it trades like a stock on an exchange. There are many different types of ETFs available, including those that focus on specific sectors, countries, or investment styles.
One of the types of ETF is the dividend-paying ETF. These ETFs invest in stocks that pay dividends, which are payments made by a company to existing shareholders, the timeline of which can vary - quarterly, semi-annually or annually.
Dividend ETFs: What to look out for?
Dividend-paying ETFs can be a good choice for investors looking for a steady stream of income from their investments, as the dividends can help provide a regular cash flow.
When looking for a dividend-paying ETF, there are a few things to consider, such as the ETF's dividend yield (the dividends paid divided by its share price). Since share prices change everyday, so does an ETFs dividend yield.
Dividend yield is the most important factor while choosing a dividend focused ETF because it tells you how much dividend you are earning for each share purchased.
However, dividend payouts are not testament for an ETF to be good. Your investment strategy should not be focused solely on dividend-paying ETFs.
This means that it is good to keep dividends as one of the parameters to pick the fund you want to invest in but that should not become a decisive check. Not all high dividend-paying ETFs are good and there is no guarantee whether they will perform well in the future or not.
It's also important to consider the overall risk profile and management of the ETFs. Some ETFs may focus on high yield and potentially high-risk dividend stock whereas some others may focus on a more diversified and lower-yielding but stable portfolio.
An investor can choose the ETF based on the risk taking capabilities.
How to invest in dividend ETFs
A dividend ETF typically includes dozens, if not hundreds, of dividend stocks. That instantly provides you with diversification, and makes your investing slightly safer as the risk is spread out.
You can buy ETFs from any stock market broker. To check top listed ETFs, click here.
Top 10 dividend paying ETFs: Analysis
| ETF Name | Ticker | Dividend Yield | Expense Ratio | 1-Yr Return Trend |
| Vanguard Emerging Markets Stock Index Fund | VWO | 3.58% | 0.08% | -16.75% |
| Vanguard Total International Stock Fund | VXUS | 3.57% | 0.07% | -14.32% |
| Vanguard Developed Markets Index Fund | VEA | 3.45% | 0.05% | -14.30% |
| Energy Select Sector SPDR Fund | XLE | 3.35% | 0.10% | 42.70% |
| Schwab U.S. Dividend Equity ETF | SCHD | 3.14% | 0.06% | -5.61% |
| SPDR S&P Dividend ETF | SDY | 2.49% | 0.35% | -2.11% |
| iShares Russell 1000 Value ETF | IWD | 1.88% | 0.18% | -8.40% |
| SPDR Dow Jones Industrial Average ETF Trust | DIY | 1.80% | 0.16% | -7.07% |
| iShares Core S&P 500 ETF | IVV | 1.51% | 0.03% | -16.60% |
| iShares Russell 2000 ETF | IWM | 1.29% | 0.19% | -17.39% |
This is not investment advice. Investments in the securities market are subject to market risk, read all the related documents carefully before investing. Past performance is not indicative of future returns.
Are dividend ETF better?
Dividend ETFs may be a great option if you're looking to build an income stream over time–but you don't want the job of picking stocks. Lean into diversified funds with low expense ratios and reinvest those dividends if you can
Is ETF dividend taxable?
The IRS taxes dividends and interest payments from ETFs just like income from the underlying stocks or bonds, with the income being reported on your 1099 statement. Profits on ETFs sold at a gain are taxed like the underlying stocks or bonds as well.
Are dividend ETFs good for long term?
Dividend ETFs can provide a number of benefits for investors seeking safe retirement income or long-term growth. In fact, many investors own a combination of dividend ETFs and individual stocks in their portfolios.