Best Dividend ETFs Right Now

Some companies distribute some of their earnings in the form of dividends to shareholders regularly. Dividend stocks are attractive investments for investors looking to make some income from their portfolios. If you don’t like picking stocks, then dividend exchange-traded funds (ETFs) offer a convenient way to invest in a variety of top dividend-paying stocks.  Here is Benzinga's guide to the best dividend ETFs.

Quick Look at the Best Dividend ETFs:

• Vanguard Total Stock Market ETF
• Vanguard Dividend Appreciation ETF
• Vanguard High Dividend Yield ETF
• iShares Core High Dividend ETF

Dividend ETFs Biggest Gainers and Losers

There’s no guarantee that every dividend ETF will yield high returns. Check out the live updates below to see which dividend ETFs are doing well and which aren’t performing at the top of their game.

Premarket Dividend ETFs

Unlike mutual funds, you can invest in an ETF during the premarket trading hours. This window is open from 4 a.m. to 9:30 a.m. ET. Many investors look at the premarket trading activity to anticipate the direction of the regular session.

Aftermarket Dividend ETFs

Aftermarket trading also lets you invest in ETFs and also involves low trading activity. Investors use aftermarket trading if news breaks out after the close of the stock exchange. After-hours trading is open from 4 p.m. to 8 p.m. ET. 

Why Invest in Dividend ETFs?

Dividend-paying ETFs are a popular choice among investors and traders for these reasons:

• Low risk: Investing in dividend ETFs offers more diversification. They are carefully handpicked from a range of stocks. If 1 stock performs poorly, other items in your basket can make up for it.
• Low fees: ETFs save on management costs like service fees, load fees, shareholder accounting expenses and management fees. There is only 1 transaction per trade, which means that you can avoid unnecessary fees and still trade multiple stocks.
• High liquidity: ETFs can be bought or sold very easily throughout the day as well as during pre- and after- trading hours. 
• Tax advantages: You’ll pay more capital gains taxes on mutual funds compared to ETFs. Capital gains tax on ETFs only happens when you sell an ETF, whereas mutual funds pass on capital gains taxes to investors through the life of the investment. 
• Balanced portfolio: A good dividend ETF can be a great addition to any long-term investor’s portfolio. ETFs can balance out other risky assets in your portfolio.

4 Dividend ETFs by AUM

Not all dividend ETFs are created equal. ETFs are created with a particular strategy and objective. A fund’s assets under management (AUM) is a proven indicator of stability in an investment. Our top 3 picks all belong to the ETF advisor Vanguard Equity Index Group. 

1. Vanguard Total Stock Market ETF (NYSEARCA: VTI)

VTI tracks the performance of the CRSP U.S. Total Market Index. The ETF is diversified among small-, mid- and large-cap companies and employs a passively managed index sampling strategy. VTI’s expense ratio is 0.03%.

VTI invests in a total of 3,535 stocks with fund total net assets of a whopping $736.8 billion. The net assets of the 10 largest holdings fill 22.4% of the fund and include Microsoft, Apple, Amazon, Alphabet, Facebook, Berkshire Hathaway, Johnson & Johnson, Visa, Procter & Gamble and JPMorgan Chase. The top equity sectors include tech, finance, healthcare and consumer service.

2. Vanguard Dividend Appreciation ETF (NYSEARCA: VIG) 

VIG tracks the performance of the NASDAQ U.S. Dividend Achievers Select Index. The ETF tracks companies with a record of growing dividends annually. VIG’s expense ratio is 0.06%.

VIG invests in a total of 182 stocks with total net assets of $44.5 billion. VIG predominantly invests in industrials and consumer service. The 10 largest holdings account for 37.5% and include companies like Microsoft, Walmart, Procter & Gamble, Visa, Johnson & Johnson, Comcast, Abbott Laboratories, McDonald’s, Costco Wholesale and Medtronic.

3. Vanguard High Dividend Yield ETF (NYSEARCA: VYM)

VYM tracks the performance of the FTSE® High Dividend Yield Index and its expense ratio is a low 0.06%.

VYM invests in a total of 395 stocks and total net assets are $30.6 billion. The top 10 largest holdings account for 27.90% of total net assets in the health care, financials and consumer goods sectors. The majority holders are Johnson & Johnson, JPMorgan Chase, Procter & Gamble, Intel, Verizon Communications, AT&T, Merck, Pfizer, Coca-Cola and Cisco Systems.

4. iShares Core High Dividend ETF (HDV)

The iShares Core High Dividend ETF seeks to track the investment results of an index composed of relatively high dividend paying U.S. equities.

Best Online Brokers for Dividend ETFs

When you want to invest in dividend ETFs, you’ve got a choice of many quality brokers that you can consult. Three particular online brokers stand out compared to the rest.

1. TradeStation

TradeStation is a 1-stop trading solution for investors looking for a single platform for all their trading needs.  It offers a wide range of tools, indicators and screeners so you can be proactive as you trade.

Whether you like trading on a mobile app or desktop, TradeStation’s known for convenience. Tradestation’s own app store offers several custom TradeStation-compatible software products, indicators, strategies and other apps. The company also helps you improve your trading skills with educational offerings and personalized support from licensed professionals. 

2. Firstrade

Firstrade is an award-winning online broker that provides easy-to-use online and mobile trading for ETFs and other financial products. You’ll pay $0 commission on ETFs with Firstrade. 

Firstrade offers a quick view of ETF market events, customizable charts, alerts and streaming market news. You can trade on any device you feel comfortable using — desktop, tablet or smartphone. It also offers many investment classes and courses for beginners. If you’re new to trading, Firstrade can be a great fit.

3. TD Ameritrade

TD Ameritrade is perfect if you want a low-cost, powerful trading platform. TD Ameritrade charges $0 in commissions and maintenance fees, making it an ideal choice for casual traders and long-term investors.

TD Ameritrade makes it easy for you to join and trade with the help of a range of instructional courses. It was named #1 Overall Broker and offers excellent reference tools, education and customer service. Its ETF Market Center offers personalized screeners, commentary and more. You can use its research tools to help you select ETFs for your portfolio on an objective basis, improving your confidence as a trader. You can also make use of its research reports and news articles available on the platform.

Reap the Benefits of Dividend ETFs

Investing in dividend ETFs is a great way to generate income regularly. If you don’t like choosing dividend stocks, then you will find investing in dividend ETFs to be a better fit. While they are low risk, they are still not risk-free. A quality broker can help you align the right ETF with your needs, allowing you to look to the future or plan for regular income in the here and now.

Frequently Asked Questions