Best High-Dividend ETFs for Income Investors To Buy Right Now
Written by
Rudri Bhatt Patel, CFHC™
Edited by
Joe Evans
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High-dividend ETFs are popular with investors who want consistent income without picking individual dividend stocks. These funds hold baskets of dividend-paying companies and distribute income to shareholders, often on a quarterly or monthly basis. They are commonly used by retirees, income-focused investors or anyone looking to balance growth-heavy portfolios with cash flow.
That said, higher yield doesn’t always mean better. Dividend sustainability, sector concentration and interest-rate sensitivity all play a role in long-term performance. The best high-dividend ETFs tend to balance yield with financial quality.
At a Glance: Best High-Dividend ETFs
ETF Ticker Dividend Focus High-yield stocks One-Line Reason It Stands Out Vanguard High Dividend Yield ETF VYM High dividend income Medium Low-cost exposure to established dividend payers Schwab U.S. Dividend Equity ETF SCHD Quality dividends Medium Emphasis on sustainable cash flow iShares Select Dividend ETF DVY High yield stocks Medium Focus on income-producing U.S. companies SPDR Portfolio S&P 500 High Dividend ETF SPYD High current yield Medium to high Concentrated high-yield exposure JPMorgan Equity Premium Income ETF JEPI Income via dividends + options Medium Enhanced income strategy iShares Core High Dividend ETF HDV Dividend-paying U.S. stocks Medium Emphasis on financially strong companies Dividend strategies and yields are based on current fund sponsor disclosures.
Why Investors Choose High-Dividend ETFs
Dividends have historically played a major role in equity returns. According to S&P Dow Jones Indices, dividends accounted for about one-third of total U.S. stock market returns since 1926.
Dividend ETFs simplify income investing by spreading risk across many companies rather than relying on a few high-yield stocks.
What Is a High-Dividend ETF?
A high-dividend ETF is an exchange-traded fund that invests in companies with above-average dividend yields. Some funds focus strictly on yield, while others screen for dividend sustainability, earnings strength or balance sheet quality.
The U.S. Securities and Exchange Commission notes that dividend-focused funds can still lose value and that higher yields may signal higher risk.
Best High-Dividend ETFs To Consider
Vanguard High Dividend Yield ETF (VYM)
VYM tracks an index of U.S. companies with above-average dividend yields. Vanguard disclosures highlight its low expense ratio and broad diversification across sectors. Yield is moderate rather than extreme, which helps reduce dividend cut risk.
Schwab U.S. Dividend Equity ETF (SCHD)
SCHD focuses on companies with strong cash flow and a history of paying dividends. According to Schwab, the fund emphasizes dividend quality rather than yield alone. It is widely used by income investors seeking stability.
iShares Select Dividend ETF (DVY)
DVY invests in U.S. companies with high dividend yields and consistent payment histories. BlackRock disclosures show sector exposure tilted toward utilities and financials. Sector concentration can increase sensitivity to interest rates.
SPDR Portfolio S&P 500 High Dividend ETF (SPYD)
SPYD holds the highest-yielding stocks in the S&P 500. According to State Street Global Advisors, the fund offers higher income but with greater volatility and dividend variability. It can underperform during market stress.
JPMorgan Equity Premium Income ETF (JEPI)
JEPI combines dividend-paying stocks with an options overlay to generate income. JPMorgan disclosures note that covered call strategies can boost income but may limit upside. It is often used by income-focused investors rather than growth seekers.
iShares Core High Dividend ETF (HDV)
HDV invests in financially strong U.S. companies with high dividend yields. BlackRock reports that the fund emphasizes balance sheet quality. Energy and consumer staples exposure can influence performance.
High-Dividend ETFs vs. Dividend Stocks
| Feature | High-Dividend ETFs | Individual Dividend Stocks |
|---|---|---|
| Diversification | High | Low |
| Income Stability | Blended | Company-dependent |
| Volatility | Moderate | Higher |
| Research Required | Lower | Higher |
| Dividend Risk | Spread across holdings | Concentrated |
The Federal Reserve Bank of St. Louis notes that dividend-paying stocks can be sensitive to interest rate changes, particularly when yields compete with those of bonds.
Risks To Understand Before Investing
High-dividend ETFs are not risk-free. Rising interest rates can pressure prices, and dividend cuts can reduce income. The SEC cautions that investors should not rely solely on yield when evaluating dividend investments.
Sector concentration, inflation and economic downturns can also impact performance.
How High-Dividend ETFs Fit Into a Portfolio
Many investors use high-dividend ETFs as a source of income, complementing growth stocks and bonds. Vanguard research suggests that dividend strategies can help reduce volatility when combined with diversified assets.
Position sizing matters, especially for retirees relying on distributions.
Final Take to GO
High-dividend ETFs offer a convenient way to generate income while maintaining diversification. Funds like VYM and SCHD emphasize sustainability, while options-based ETFs like JEPI target higher income with trade-offs.
For most investors, high-dividend ETFs work best as part of a balanced, diversified portfolio rather than a standalone strategy.
Best High-Dividend ETF FAQ
- What is a high-dividend ETF?
- A high-dividend ETF invests in companies that pay above-average dividends and distribute income to shareholders.
- Are high-dividend ETFs safe?
- They are diversified but still subject to market, interest-rate and dividend-cut risk.
- Do high-dividend ETFs pay monthly income?
- Some pay monthly distributions, while others pay quarterly depending on the fund.
- Are high-dividend ETFs good for retirees?
- They can be useful for income, but retirees should consider risk, taxes and diversification.
- How are dividends from ETFs taxed?
- Dividends may be taxed as ordinary income or qualified dividends, depending on the fund and account type.
John Csiszar, Andrew Lisa, Daria Uhlig and Daniela Rivera-Herrera contributed to the reporting for this article.
Data is accurate as of Jan. 28, 2026, and is subject to change.
Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.
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- S&P Global "The Importance of Dividends"
- SEC Investor.gov "Ex-Dividend Dates: When Are You Entitled to Stock and Cash Dividends"
- SEC Investor.gov "Dividend"
- The Federal Reserve Bank of St. Louis "Dividends and Interest Rates"
- SEC Investor.gov "What is Risk?"
- Vanguard "Vanguard High Dividend Yield ETF (VYM)"
- Schwab "Schwab U.S. Dividend Equity ETF (SCHD)"
- iShares "iShares Select Dividend ETF (DVY)"
- SPDR "SPDR Portfolio S&P 500 High Dividend ETF (SPYD)"
- J.P. Morgan "JPMorgan Equity Premium Income ETF (JEPI)"
- iShares "iShares Core High Dividend ETF (HDV)"
