A Tour of Popular Dividend ETFs

A handful of dividend ETFs hold most of the money invested in the category. You’ll hear their tickers constantly in investing forums and articles. Here’s what each one actually owns, how it decides, and what that means for you. Live figures are at the top so you can keep them in mind as you read.

Expense ratios change from time to time, so check the provider’s site for the current figure. At the time of writing all of these except NOBL charged under 0.1% a year.

SCHD: Schwab U.S. Dividend Equity ETF

SCHD tracks the Dow Jones U.S. Dividend 100 Index. To be eligible a company needs at least ten consecutive years of paying dividends. Each one is then scored on four things: free cash flow relative to total debt, return on equity, dividend yield and five-year dividend growth. The top 100 make it in, weighted by size with a cap on any single position. The index reshuffles once a year, in March.

What it’s like: a yield noticeably above the market from companies that pass financial strength tests. Popular as a “core” dividend holding. It had a 3-for-1 share split in October 2024, so older articles quote much higher share prices. Its annual reshuffles can shift its sector mix a lot, which is worth checking each spring.

VYM: Vanguard High Dividend Yield ETF

VYM follows the FTSE High Dividend Yield Index: US companies forecast to yield above the market average, excluding REITs, weighted by size. It holds several hundred companies, far more than most dividend funds.

What it’s like: broad and low cost. The size weighting means big banks, healthcare and energy companies dominate. Its yield is moderate rather than high, and it behaves like a value tilted version of the market.

VIG: Vanguard Dividend Appreciation ETF

VIG tracks the S&P U.S. Dividend Growers Index: companies with at least ten consecutive years of dividend increases, excluding the top 25% by yield. That second rule is the clever part. It deliberately avoids the stocks whose high yields might signal trouble.

What it’s like: a lower yield, often under 2%, with more technology, healthcare and industrials than most dividend funds. Its returns tend to track the broad market more closely. Think of it as a growth of income fund rather than an income fund.

DGRO: iShares Core Dividend Growth ETF

DGRO follows a Morningstar index of companies with at least five years of uninterrupted dividend growth and a payout ratio under 75%, leaving out the highest yielders. Holdings are weighted by the total dividends they pay.

What it’s like: a middle path. A slightly higher yield than VIG, a broad spread of several hundred holdings and a shorter growth requirement, which lets younger dividend growers in sooner.

HDV: iShares Core High Dividend ETF

HDV holds about 75 high yielding US companies that pass Morningstar’s tests for financial health and competitive advantage.

What it’s like: concentrated and defensive. A few big energy, healthcare and consumer staples names make up a large share of the fund, so it can behave quite differently from the broad market.

SPYD: SPDR Portfolio S&P 500 High Dividend ETF

SPYD takes the 80 highest yielding stocks in the S&P 500 and holds them in equal weights, rebalancing twice a year.

What it’s like: the purest high yield play in this group, with heavy weights in real estate, utilities and financials. There’s no quality screen, so it can hold companies whose yields are high because they’re in trouble, and it tends to be hit hard when interest rates rise.

NOBL: ProShares S&P 500 Dividend Aristocrats ETF

NOBL holds the Dividend Aristocrats: S&P 500 companies with 25 or more years of consecutive raises, in equal weights. Its expense ratio, around 0.35%, is several times that of the others here.

What it’s like: high quality, steady businesses with a modest yield. Equal weighting gives smaller Aristocrats as much say as giants. See The Dividend Aristocrats.

At a glance