Best Dividend ETFs Of 2026

Best Dividend ETFs Of 2026

Fidelity High Dividend ETF (FDVV)

Fidelity High Dividend ETF (FDVV)

Expense ratio

0.15%

Inception date

September 2016

Yield

2.69%

0.15%

September 2016

2.69%

Editor’s Take

The Fidelity High Dividend ETF aims to reflect performances of large and mid-cap dividends. These are equities that are expected to not only pay dividends, but also to grow. Part of the Fidelity High Dividend ETF mandate is to find securities to generate income.

At least 80% of FDVV’s holdings are invested in equities at a given time, and most of its assets are in U.S. equities. Technology and financial services represent the largest sectors in terms of this fund’s holdings.

Schwab Fundamental International Equity ETF (FNDF)

Schwab Fundamental International Equity ETF (FNDF)

Expense ratio

0.25%

Inception date

August 2013

Yield

3.01%

0.25%

August 2013

3.01%

Editor’s Take

The Schwab Fundamental International Equity ETF seeks to find yield from the performance of large non-U.S. developed market companies. It’s considered somewhat of a contrarian investing with that approach. It’s also aimed at those looking for foreign value stocks with yield exposure.

Some top holdings include Samsung Electronics, Shell, TotalEnergies, Toyota Motor Corp., BP, Banco Santander and HSBC. Over a third of the portfolio is made up of sector weightings in financials and industrials.

One difference with FNDF compared with other ETFs on this list is that the distribution frequency is semiannually; the other dividend funds on this list pay quarterly.

Dimensional International Value ETF (DFIV)

Dimensional International Value ETF (DFIV)

Expense ratio

0.27%

Inception date

April 1999

Yield

2.58%

0.27%

April 1999

2.58%

Editor’s Take

Dimensional International Value ETF comes with over 27 years under its belt. DFIV’s focus is on international equities, with a thesis of creating long-term capital appreciation while minimizing federal income taxes.

DFIV’s overall goal is to invest in non-U.S. large cap value stocks, targeting higher- than- expected returns. In terms of total returns, it’s worth pointing out that there have only been two down years since 2019. Those down years were minimized to a loss of less than 4%.

This international dividend ETF’s top holdings include big names you’ve probably heard of before: Shell, Toyota, Banco Santander, TotalEnergies and HSBC Holdings. Also of note: Japan, the U.K. and Canada represent more than 45% of the portfolio’s holdings.

iShares Select Dividend ETF (DVY)

iShares Select Dividend ETF (DVY)

Expense ratio

0.38%

Inception date

November 2003

Yield

3.38%

0.38%

November 2003

3.38%

Editor’s Take

IShares Select Dividend ETF holds about 100 equities at a given time, all of which come with a five-year track record of paying dividends. The fund uses the Dow Jones U.S. Select Dividend Index as its benchmark, which is “composed of relatively high dividend yielding U.S. stocks.”

DVY is passively managed, so there are more management fees in the expense ratio, compared with other dividend ETFs on this list. Around 50% of holdings are in the financial and utilities sectors.

DVY has delivered a good one-two punch over the past five years, with a solid dividend and a market value gain of more than 25% over five years, as of June 2026.

Schwab U.S. Dividend Equity ETF (SCHD)

Schwab U.S. Dividend Equity ETF (SCHD)

Expense ratio

0.06%

Inception date

October 2011

Yield

3.29%

0.06%

October 2011

3.29%

Editor’s Take

The Schwab U.S. Dividend Equity ETF tracks the Dow Jones U.S. Dividend 100 Index. These are the 100 stocks selected based on quality and sustainability for their strong financial ratios. This low-cost ETF has a much more concentrated portfolio, which can be desirable if you’re looking for a “higher conviction” holding.

SCHD’s top portfolio holdings include well-known blue-chips: Chevron Corp., Coca-Cola Co., Merck & Co and Procter & Gamble Co. Portfolio holdings lean toward energy, consumer staples, technology and health care sectors.

Methodology

We screened out sector funds, such as those in energy or real estate, as well as hedged equity and bond ETFs.

Our curated rankings of the top dividend ETFs were created by screening a list of all available U.S.-listed dividend ETFs based on the following “must-have” metrics:

• Value blend: We filtered by funds categorized as value, whether it was mid-cap value, large-cap value or foreign large value.
• Morningstar rating: All of the ETFs selected have at least a 3-star rating from Morningstar. This is a quantitative, rearward-looking measure of an ETF’s historical performance.
• AUM. All the selected ETFs currently have at least $8 billion in assets under management. A higher AUM indicates greater investor confidence and interest in an ETF.
• 12-month dividend yield. All selected ETFs have a trailing 12-month yield of at least 2.58%. It is important to note that an ETF’s dividend yield can fluctuate, especially as its share price changes.
• Expense ratios. To be considered for this list, a dividend ETF must have a net expense ratio of less than 0.70%.
• Inception date. We screened out newer funds that have been launched within three years. 
• Positive three-year total return. We selected only funds with a positive three-year total return performance. So, investors not only benefit from yield, but also appreciation in fund value.

What Is a Dividend ETF?

A dividend ETF is a fund that holds a portfolio of multiple equities and assets. That portfolio is dictated by its methodology and thesis.

Like stocks, dividend ETFs trade on exchanges throughout the day, and you can purchase them through a brokerage firm.

Like other ETFs, dividend ETF’s can be actively or passively managed and hold either U.S. or non-U.S. equities. When you’re thinking about what type of dividend ETF to buy, some prioritize higher yields. But buyer beware: Higher yields can indicate potential red flags and that the dividend may not be sustainable.

How to Invest in Dividend ETFs

Investing in a dividend-paying ETF is like investing in any other type of ETF. You’ll start by opening a brokerage account. Once you’ve funded your account or linked to a method of payment, you’ll then search for the dividend ETF of your choice. You’ll do so by entering its ticker symbol.

For example, if you’re interested in the Fidelity High Dividend ETF, you’ll check to see if your brokerage offers that ETF and search for the fund with its ticker.

Once you’re ready to make a purchase, you specify the number of shares you wish to buy and the type of order. It might be a market order, which is bought at the current price. You could also specify a limit order, where you set and specify the price that you’re willing to buy the shares for. Then you’ll “submit” your order.

One thing to keep in mind: Dividends can be distributed monthly, quarterly, semiannually or annually. All that depends on the ETF; most are quarterly. But there are monthly dividend ETFs. Here are some well-known monthly dividend ETFs: Invesco’s S&P 500 High Dividend Low Volatility ETF (SPHD) and WisdomTree’s Mortgage Plus Bond Fund (MTGP).

And another thing to note: Dividend payments may be subject to tax rates. But it’s important to distinguish qualified dividends, which can benefit from lower tax rates, and other dividends, which may be taxed at your ordinary income.

How to Choose the Best Dividend ETF?

When considering ETFs with the best dividends, you should go beyond just looking at yields and examine the dividend-paying ETF’s thesis and benchmark.

Take a look at its underlying holdings expense ratio and total assets under management. You’ll want to consider the overall reputation of a particular high-dividend ETF, too.

Here are a few quick factors to consider:

• Dividend yields. This is the percentage of the purchase price paid in dividends during the prior 12 months. If a dividend-paying ETF is worth $100 and pays $10 in dividends, that means it carries a 10% dividend TTM yield.
• Dividend growth. Just because a stock pays a dividend right now doesn’t mean it will do so in the future. That’s why some investors are drawn to dividend aristocrats. These stocks have demonstrated at least 25 years of consecutive dividend growth. There’s even a popular dividend aristocrat ETF that includes them all: the S&P 500 Dividend Aristocrats ETF (NOBL).
• Dividend quality. This applies to the creditworthiness of the underlying stocks held by a dividend ETF. If the fund owns riskier companies, your returns and future yields could be at risk. As a general rule of thumb, you want to avoid funds that use riskier companies to boost their yields.

How Do Dividend ETFs Compare to Dividend Stocks?

Both dividend stocks and dividend ETFs can act as a source of passive income. But these investment vehicles behave as very different actors in an investment portfolio. So, it’s important to know key differences:

Diversification and risk. With a dividend stock portfolio, you’re choosing each company. With dividend ETFs, you’re picking funds that already hold several dividend paying companies in the portfolio.

Control and customization. When you’re picking individual dividend stocks, your portfolio is likely to be more concentrated. So, you might be more exposed to upsides and downsides. Dividend ETFs, on the other hand, hold dozens of companies, if not hundreds. That diversifies risk. A lot of the funds on our list of the best high-paying dividends hold at least 100 equities or more.

The role in an investment portfolio. Dividend ETFs are a simplified path. Choosing a customized dividend stock portfolio involves more active management.

Frequently Asked Questions (FAQs)