how to invest


career, food, travel


saving, credit, debt


insurance, security


401K, IRA, FI, Retire

Home » Dividends, ETFs

Dividend ETF’s: The Passive Way to Invest in Dividends

Last updated by on January 6, 2015

We’ve discussed the virtues of dividend investing and even highlighted a good place to start if you want to invest in individual stocks – the Dividend Aristocrats.

Next, I want to highlight a passive index style of dividend ETF investing.

ETF’s aim to follow the performance of an index. Like all ETF’s, dividend ETF’s typically carry low expense ratios. And there are ways to execute commission-free ETF trades through an online broker, so that you do not pay when you buy or sell an ETF.

You do lose a little bit of freedom in choosing individual stocks, but that might not necessarily be a bad thing, as most of us are horrible stock pickers.

The positives for ETF investing vs. individual stocks include:

Dividend ETF List

  1. Instant diversification, which can be relatively important as some of the highest yielding dividend stocks are the riskiest.
  2. Lower trading fees vs. individual stock investing if you execute commission-free ETF trading.
  3. A passive index investing style – simply add to your position when you have additional funds.
  4. Less record keeping on dividends for tax purposes. Owning a few ETF’s cuts down on having to track dividend payouts on numerous stocks.

To get you started, I thought I’d create a list of some of the top dividend ETF’s on the market in to 3 separate categories – domestic, international, and sector. I’ll highlight the name, ticker, yield, and expense ratio of each. Note that the yields and expense ratios may change over time.

And remember, don’t simply chase yields!

Expense ratios and yields are as of 1/6/15, but change frequently, so make sure you do your homework and double check for updates.

Domestic Dividend ETF List

Name & FocusTicker SymbolExpense Ratio12-Month Yield
First Trust Morningstar Dividend Leaders ETFFDL0.45%3.23%
First Trust Value Line Dividend ETFFVD0.70%2.35%
Dow Jones Select Dividend ETFDVY0.39%3.13%
iShares High Dividend ETFHDV0.12%3.28%
Invesco Powershares Dividend Achievers ETFPFM0.40%2.48%
Invesco Powershares High Yield Equity Dividend Achievers ETFPEY0.40%3.31%
SPDR S&P 500 Dividend ETFSDY0.35%2.27%
Vanguard Dividend Appreciation ETFVIG0.10%2.00%
Vanguard High Dividend Yield ETFVYM0.10%2.93%
WisdomTree Dividend ex-Financials ETFDTN0.38%3.04%
WisdomTree Equity Income ETFDHS0.38%4.03%
WisdomTree Large Cap Dividend ETFDLN0.28%3.93%
WisdomTree Mid Cap Dividend ETFDON0.38%4.74%
WisdomTree Small Cap Dividend ETFDES0.38%4.90%
WisdomTree Total Dividend ETFDTD0.28%3.76%

International Dividend ETF List

I’ve discussed why international diversification is important vs. putting all of your eggs in the U.S. domestic basket.

To that end, there are a number of international and emerging marketing dividend ETF’s to choose from.

Name & FocusTicker SymbolExpense RatioAnnual Yield
iShares Dow Jones International Select Dividend Index FundIDV0.50%3.24%
Invesco Powershares International Dividend Achievers ETFPID0.54%4.03%
SPDR S&P International Dividend ETFDWX0.45%5.99%
WisdomTree International Dividend ex-Financials ETFDOO0.58%5.16%
WisdomTree Dividend of Europe, Far East Asia, Australasia ETFDWM0.48%3.21%
WisdomTree International LargeCap Dividend ETFText of linkDOL0.48%3.30%
WisdomTree International MidCap Dividend ETFDIM0.58%7.56%
WisdomTree International SmallCap Dividend ETFDLS0.58%1.93%
WisdomTree Japan SmallCap Dividend ETFDFJ0.58%2.89%
WisdomTree Emerging Markets SmallCap Dividend ETFDGS0.63%2.34%
EGShares Low Volatility Emerging Markets DividendHILO0.85%5.95%
Global X SuperDividend ETFSDIV0.58%6.58%

Sector High Dividend ETF List

There are also a number of sectors that inherently have high dividend payouts – real estate, government and corporate bonds, telecom, and utilities. Here are a few of the most popular dividend ETF’s that cover these sectors.

Name & FocusTicker SymbolExpense RatioAnnual Yield
Global X Permanent ETF (25% Stock, Long-Term Bond, Short-Term Bond, Gold/Silver)PERM0.49%n/a
iShares Barclays TIPS Bond ETF (Treasury Inflation Protected Securities)TIP0.20%0.65%
iShares FTSE NAREIT Mortgage Plus Capped ETFREM0.48%10.23%
VanEck Market Vectors Mortgage REIT Income ETFMORT0.60%10.56%
SPDR Barclays Capital High Yield Bond ETFJNK0.40%6.83%
Vanguard REIT ETFVNQ0.10%3.53%
Vanguard Long-Term Corporate Bond ETFVCLT0.12%4.28%
Vanguard Telecommunication Services ETFVOX0.12%3.36%
Vanguard Utilities ETFVPU0.12%3.14%

Dividend ETF Discussion:

  • What are your favorite dividend ETF’s?
  • Do you own any of these ETF’s?
  • Do you prefer buying dividend ETF’s vs. dividend stocks?

About the Author
I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 10,000+ others by getting FREE email updates. You can also explore every post I have written, in order.

  • Brian says:

    I do not understand why people are fascinated with dividends.

    Dividends are not free money that get distributed from the dividend fairy.

    Every dollar that is distributed was previously an asset of the company, and is reflected in the stock’s price.

    Wish your favorite stock distributed a cash dividend of a couple percent? You can do it yourself by selling a few percent of your holdings in that stock. Same effect.

    • Dan says:

      While somewhat true since dividends are a way to use cash in the best way for shareholders there are too many other factors in play.

      Stocks don’t trade simply on the value of their assets, in fact, most trade on the earnings of the company (why P/E ratios matter to stock pickers). Most people correctly assume that dividends add to their return on investment, which is why stocks will pop if the company announces a dividend- market thinks that the stock is worth more because of the cash flow that the dividend provides. The market can also take it the other way- thinking the company doesn’t have any better internal investments to make, so the future is less rosy, pushing stock price down.

  • Tomas says:

    I prefer picking individual stocks, and dividends are an important factor in the decision.
    For those who don’t want to put in the extra time ETFs are a great option, though.

  • PipsToday says:

    I am a forex trader just started to invest in individual stocks. Dividends played an important role to pick individual stock. I am not familiar with all the companies listed above. So, I did not own any of the shared ETF’s and preferred dividend stocks.

  • Jason says:

    Schwab’s U.S. Dividend Equity ETF (SCHD) is a very good option too. With a 0.07% expense ratio and 2.52% twelve-month yield, it’s even lower cost than Vanguard (and the same holds true for most of Schwab’s ETFs). They’re commission-free with a Schwab account.

    I buy both dividend stocks and ETFs, among other categories. Dividends serve as an automatic filter for quality, though in choosing stocks one has to consider much more than just the dividend. The power of compounding works with reinvested dividends as it does with the growth of the original shares purchased.


Enter your:

Home | Sitemap | Terms | ©