Top 6 High-Dividend ETFs for 2021
Exchange-traded funds (ETFs) have proven benefits for investors. And if you’re looking for big dividends, you’re in the right place. I’ve sorted through hundreds of funds and found the top high dividend ETFs for 2021.
Each fund below holds a basket of dividend stocks from different industries. This diversification helps them keep a steady stream of income flowing. And the funds also come from well-established providers. They’ve led the way with fund innovation and have brought down investing costs and fees.
Also, below this list of ETFs, you’ll find some additional resources. For example, here’s our free investment calculator. It shows you how your portfolio can grow each year. Are you five, 10 or 20 years away from financial freedom? No matter how far along you are, the ETFs below can help you get there…
Best High-Dividend ETFs
Here’s a short list of the top dividend ETFs…
- Vanguard High Dividend Yield ETF (NYSE: VYM)
- iShares Core High Dividend ETF (NYSE: HDV)
- SPDR Portfolio S&P 500 High Dividend ETF (NYSE: SPYD)
- Schwab US Dividend Equity ETF (NYSE: SCHD)
- Invesco S&P 500 High Dividend Low Volatility ETF (NYSE: SPHD)
- Vanguard Dividend Appreciation ETF (NYSE: VIG).
And why did these make the cut? Let’s dive into each fund in a little more detail…
Note on High Dividend Yields: Historically, some of these dividend yields don’t look very high. But, living in a low-interest rate world, they’re some of best – and most sustainable – rates you can find. If you’re playing the long game, you’ll also hopefully see other big capital appreciation from the funds as well.
1. The Vanguard High Dividend Yield ETF has a 2.2% dividend yield. To support this yield, its heaviest sector weighting is in financials, at 18.7%. Banks and other financial service providers have been beaten down but still have steady cashflows.
This fund also has a low 0.06% expense ratio. And for that, you can get exposure to more than 400 stocks. The fund is diversified, and it’s top 10 positions make up about 25% of the total portfolio. Its top three holdings are Johnson & Johnson (NYSE: JNJ), Procter & Gamble (NYSE: PG) and JPMorgan Chase (NYSE: JPM)
2. iShares Core High Dividend ETF has a 3% dividend yield. This fund gives investors access to dividend-paying companies in good financial health. Its highest sector weighting is healthcare, at 22%.
The expense ratio comes in at 0.08%. This fund is a little more concentrated, containing just 75 stocks. And its three largest holding are AT&T (NYSE: T), Exxon Mobil (NYSE: XOM) and Johnson & Johnson.
3. SPDR Portfolio S&P 500 High Dividend ETF has a 3.1% dividend yield. To support this high yield, the largest sector weighting is in financials, followed by real estate. These sectors both provide high, stable returns.
This fund’s expense ratio comes in at 0.07%. And the fund gives investors access to 80 different stocks. Its top three holdings are Ventas (NYSE: VTR), Broadcom (Nasdaq: AVGO) and Leggett & Platt (NYSE: LEG)
4. Schwab US Dividend Equity ETF has a 1.6% dividend yield. Close to 25% of this Schwab fund is concentrated in the financial sector, followed by industrials and consumer goods.
The fund has a 0.06% expense ratio and just over 100 holdings. This fund’s top three holdings are United Parcel Service (NYSE: UPS), Qualcomm (Nasdaq: QCOM) and Texas Instruments (Nasdaq: TXN).
5. Invesco S&P 500 High Dividend Low Volatility ETF has a 2.9% dividend yield. Its goal is to provide steady income without big price swings. Its highest sector allocation is in utilities, followed by real estate.
This fund’s expense ratio is 0.30%, the highest on this list. It was almost a deal breaker but the fund gives some unique exposure to 51 holdings. Its top three positions are Iron Mountain (NYSE: IRM), CenturyLink (NYSE: CTL) and Altria Group (NYSE: MO).
6. Vanguard Dividend Appreciation ETF has a 1.5% dividend yield. That’s the lowest on this list, but the fund focuses on growth. If you have a longer time frame, you should see the dividend payouts climb faster.
Its expense ratio also comes in at a low 0.06%. That’s hard to beat. And for that, you’re getting exposure to more than 200 different stocks. Its top three holdings are Microsoft (Nasdaq: MSFT), Walmart (NYSE: WMT) and Procter & Gamble. These growth dividend stocks will continue to push this fund’s dividend payout higher.
More Investing Opportunities and Tools
If you’re a little more hands-on, you might be interested in buying individual stocks. To find our latest dividend stocks, check out that link. Also, here are some other investing opportunities…
As you begin and improve your investing approach, you’ll see your portfolio grow faster. And to see its potential growth each year, you can check out our free investment calculator. Even as an experienced investor, I use it often when planning for the future.
If you’ve found this research on high-dividend ETFs useful, feel free to share it with friends and family. And to learn more about high-yield dividend stocks, we suggest signing up for our Wealthy Retirement e-letter. It’s packed with investing tips and tricks from market experts with a special emphasis on companies with a secure dividend.
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