Which ETF pays highest dividend?
Dividend-paying ETFs can be a great tool for those looking to increase cash flow and diversify their investments. They offer a simple solution to getting exposure to a specific investing niche — in this case, stocks that pay a regular dividend. You can use those dividends to pad your income as many retirees do.
- Vanguard High Dividend Yield ETF (VYM).
- Schwab U.S. Dividend Equity ETF (SCHD).
- WisdomTree U.S. LargeCap Dividend Fund (DLN).
- ProShares S&P 500 Dividend Aristocrats ETF (NOBL).
- iShares Core Dividend Growth ETF (DGRO).
- SPDR S&P Dividend ETF (SDY).
- WisdomTree U.S. Quality Dividend Growth Fund (DGRW).
| Symbol Symbol | ETF Name ETF Name | 1 Year 1 Year |
|---|---|---|
| VIG | Vanguard Dividend Appreciation ETF | 24.07% |
| VYM | Vanguard High Dividend Yield Index ETF | 18.90% |
| VYMI | Vanguard International High Dividend Yield ETF | 20.95% |
| VIGI | Vanguard International Dividend Appreciation ETF | 20.63% |
Dividend-paying ETFs can be a great tool for those looking to increase cash flow and diversify their investments. They offer a simple solution to getting exposure to a specific investing niche — in this case, stocks that pay a regular dividend. You can use those dividends to pad your income as many retirees do.
| Symbol | Name | 5-Year Return |
|---|---|---|
| GBTC | Grayscale Bitcoin Trust | 68.87% |
| USD | ProShares Ultra Semiconductors | 57.04% |
| FNGU | MicroSectors FANG+™ Index 3X Leveraged ETN | 49.48% |
| FNGO | MicroSectors FANG+ Index 2X Leveraged ETNs | 46.93% |
| Symbol | Name | Dividend Yield |
|---|---|---|
| KBWD | Invesco KBW High Dividend Yield Financial ETF | 12.23% |
| RYLD | Global X Russell 2000 Covered Call ETF | 12.22% |
| QRMI | Global X NASDAQ 100 Risk Managed Income ETF | 12.13% |
| SURI | Simplify Propel Opportunities ETF | 12.05% |
For most personal investors, an optimal number of ETFs to hold would be 5 to 10 across asset classes, geographies, and other characteristics.
Vanguard High Dividend Yield ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VYM is an outstanding option for investors seeking exposure to the Style Box - Large Cap Value segment of the market.
Vanguard is a large investment advisor offering mutual funds and ETFs, many of which pay dividends. Most of Vanguard's ETF products pay monthly or quarterly dividends. Expense ratios are the fees investors pay for investing in a fund; the lower the better.
Vanguard High Dividend Yield Index ETF (VYM)
VYM has a dividend yield of 2.92% and paid $3.42 per share in the past year. The dividend is paid every three months and the last ex-dividend date was Mar 15, 2024.
What is the downside of dividend ETF?
Cons. No guarantee of future dividends. Stock price declines may offset yield. Dividends are taxed in the year they are distributed to shareholders.
Dividend ETFs and dividend stocks can both generate income and provide long-term growth for investors. However, they both carry similar degrees of market risk. Therefore, the choice of ETFs versus stocks comes down to an investor's personal preferences, investing goals and tolerance for risk.
Over time, the cash flow generated by those dividend payments can supplement your Social Security and pension income. Perhaps, it can even provide all the money you need to maintain your preretirement lifestyle. It is possible to live off dividends if you do a little planning.
| ETF | Assets Under Management | Expense Ratio |
|---|---|---|
| Invesco QQQ Trust (ticker: QQQ) | $240 billion | 0.2% |
| Vanguard Information Technology ETF (VGT) | $71.7 billion | 0.1% |
| Invesco AI and Next Gen Software ETF (IGPT) | $254 million | 0.6% |
| MicroSectors FANG+ Index 3X Leveraged ETN (FNGU) | $3.3 billion | 0.95% |
Generally speaking, fewer than 10 ETFs are likely enough to diversify your portfolio, but this will vary depending on your financial goals, ranging from retirement savings to income generation. When building a portfolio of ETFs, it is crucial to consider your investment strategy, objectives, and risk tolerance.
Buffett's favorite ETF
There are only two ETFs in Berkshire Hathaway's (NYSE: BRK. A) (NYSE: BRK.B) portfolio: the SPDR S&P 500 ETF Trust (NYSEMKT: SPY) and the Vanguard 500 Index Fund ETF (NYSEMKT: VOO). Both are index ETFs that track the S&P 500.
| Fund | 2023 performance (%) | 3yr performance (%) |
|---|---|---|
| PGIM Jennison US Growth | 53.47 | 4.17 |
| BlackRock GF US Growth | 52.68 | 6.37 |
| MS INVF US Insight | 52.26 | -47.18 |
| Sands Capital US Select Growth Fund | 51.3 | -20.88 |
- High-Yield Monthly Dividend Stock #4: ARMOUR Residential REIT (ARR)
- High-Yield Monthly Dividend Stock #3: AGNC Investment Corporation (AGNC)
- High-Yield Monthly Dividend Stock #2: Ellington Residential Mortgage REIT (EARN)
- High-Yield Monthly Dividend Stock #1: Orchid Island Capital (ORC)
QQQ is a technology-heavy index fund of 100 stocks. VOO is a broader and more diversified index fund of 500 stocks. QQQ has historically outperformed VOO by a significant margin but has higher concentration risk and volatility (measured by beta).
How much money should I put in one ETF?
You expose your portfolio to much higher risk with sector ETFs, so you should use them sparingly, but investing 5% to 10% of your total portfolio assets may be appropriate. If you want to be highly conservative, don't use these at all.
Vanguard S&P 500 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VOO is a great option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market.
Vanguard S&P 500 ETF (VOO)
"ETFs are a good investment option as they offer diversification, low costs and the ability to trade shares during the trading day," Wybar says.
Yields from 2% to 6% are generally considered to be a good dividend yield, but there are plenty of factors to consider when deciding if a stock's yield makes it a good investment.
Vanguard High Dividend Yield ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
