Broad US Dividend ETFs List
(click on symbol for data and articles)

Barclays iShares ETFs
iShares Dow Jones Select Dividend Index Fund (DVY)

Claymore ETFs
Claymore/Zacks Yield Hog ETF (CVY)
Claymore/BBD High Income Index ETF (LVL)

First Trust ETFs
First Trust Morningstar Dividend Leaders (FDL)

PowerShares ETFs
Dividend Achievers Portfolio (PFM)
High Growth Rate Dividend Achievers Portfolio (PHJ)
High Yield Equity Dividend Achievers Portfolio (PEY)

State Street Global Advisors ETFs
SPDR S&P Dividend ETF (SDY)

Vanguard Index ETFs
Vanguard Dividend Appreciation ETF (VIG)
Vanguard High Dividend Yield ETF (VYM)

WisdomTree ETFs
WisdomTree Total Dividend Fund (DTD)
WisdomTree High-Yielding Equity Fund (DHS)
WisdomTree Dividend Top 100 Fund (DTN)

What Are They?

  • Dividend ETFs track indexes in which stocks are weighted by their dividend payments. Some of these ETFs also take account of the dividend yield (the percentage of the stock's market cap paid out as a dividend each year), whether the dividend has been sustained or risen over time, and for how long the stock has paid a dividend.
  • Dividend ETFs cover broad indexes, US and foreign stocks, and individual sectors. Broad US dividend ETFs are those that pick the dividend paying stocks from the broad US indexes, and cover multiple sectors in a single ETF.

Why & How To Use Them

  • Proponents of dividend-paying stocks argue that they have outperformed the broad market in the long-term (see Further Reading below). Income-oriented investors, for example those in retirement, may also want to raise the income yield of their portfolios.
  • If you accept the case for dividend-paying stocks, there are two ways to use these ETFs: (1) Build a portfolio entirely from dividend-paying stocks, for example using the WisdomTree ETFs. (2) Construct a portfolio tilted to dividend-paying stocks by adding one or more of these ETFs to a portfolio of broad index ETFs.

What to Look Out For

  • Compared to broader index ETFs, dividend-paying ETFs tend to have higher expense ratios and wider buy-sell spreads (which makes them more costly to buy and sell). Since the higher fees come out of the dividends paid, that reduces some of the extra yield.
  • While dividend-paying stocks have a good track record, the theoretical case for them is controversial. All else being equal, dividend-paying stocks should be less desirable than stocks of companies that buy back stock if the investor pays the same taxes on dividends as on long term capital gains.

Further Reading

This page is part of The Seeking Alpha ETF Selector which sorts ETFs by type, highlights how to use them and what to look out for, and provides links to articles that discuss key issues for investors.

By SA Editors

Become a Contributor Submit an Article

This article has 3 comments:

  • Apr 16 08:15 AM
    Have we missed out any ETFs here? Or any Seeking Alpha articles that are important to understanding them? If so, please leave a comment and let us know!
  • Scroll down to the bottom half of the page at shorterlink.com/?EGA7G...

    Regards,
    Mike

    Loans that change lives - kiva.org
  • Apr 16 06:05 PM
    Thanks Mike. Some of those ETFs don't appear on this page because we're breaking them out in a more granular way. See:

    International Dividend ETFs

    US Market Cap/Dividend ETFs

    David
  • Long Ideas

  • Short Ideas

  • Cramer's Picks

SA Partners

Hedge Fund Jobs

Job Seekers:

  • Search jobs by category
  • Get job alerts by email or live feed
  • Apply online
See full list of jobs »

Employers

  • See all recruitment options
  • Get applications online or by email
Post a job »

Trading Center