Top-5 Best Dividend ETF’s

Start investing in dividend stocks can be done for example with a basket of 15+ different individual dividend stocks to accomplish differentiation and risk reduction. Alternatively, you could start with one or more dividend ETF’s and even with little money. The question is what is the best dividend ETF?

Five Dividend ETF Analyzed

There are several (high-)dividend equities indices available to invest in via ETFs, like the S&P 500 Dividend aristocrats (NOBL). In this analysis, we will check which of these five ETFs performed best over the last five years. Next to performance, we also look at draw-downs during COVID-19 crisis in 2020. What is the best dividend ETF for long-term performance? Find out below!

As a first step, we looked at ten well-known dividend ETF’s:

Dividend ETF	Symbol
iShares Core Dividend Growth ETF	DGRO
WisdomTree U.S. Dividend Growth ETF	DGRW
iShares Select Dividend ETF	DVY
ProShares S&P 500 Dividend Aristocrats ETF	NOBL
Schwab U.S. Dividend Equity ETF	SCHD
SPDR S&P Dividend ETF	SDY
Invesco S&P 500 High Dividend Yield Low Volatility Portfolio ETF	SPHD
SPDR S&P 500 High Dividend ETF	SPYD
Vanguard Dividend Appreciation ETF	VIG
Vanguard High Dividend Yield ETF	VYM

 

After a first scan, I became clear that high dividend ETF’s are not the best for long-term performance. In this article, we will focus on the best five dividend ETF’s versus the S&P 500 index tracker (VOO). Surprisingly, none of the five dividend ETF’s did beat the S&P500 index when it comes to total return over last 5 years. See here how an initial investment could have grown over the last 5 years. The WisdomTree U.S. Dividend Growth ETF is the most closes one.

We also look at draw-downs during the COVID-19 crisis in 2020. The Vanguard Dividend Appreciation ETF was the ETF with the lowest draw-down during the first COVID-19 impact from 02/20/2020 – 03/23/2020.

 

 

Here are more details on the top 5 dividend ETFs.

#5 Vanguard High Dividend Yield ETF

Vanguard High Dividend Yield ETF
Ticker	VYM	Criteria	Yield
Benchmark	FTSE High Dividend Yield Index	Weighting	Market-cap.
Holdings	412	Dividend Yield	3.19%
5 years performance	10.93%	Covid-19 Performance	-32.80%
Annual costs	0.06% p.a.

 

#4 ProShares S&P 500 Dividend Aristocrats ETF

ProShares S&P 500 Dividend Aristocrats ETF
Ticker	NOBL	Criteria	Yield
Benchmark	S&P 500 Dividend Aristocrat	Weighting	Equal.
Holdings	65	Dividend Yield	2.14%
5 years performance	13.88%	Covid-19 Performance	-32.95%
Annual costs	0.35% p.a.

 

#3 Vanguard Dividend Appreciation ETF

Vanguard Dividend Appreciation ETF
Ticker	VIG	Criteria	Quality
Benchmark	NASDAQ US Dividend Achievers Select Index	Weighting	Market-cap.
Holdings	214	Dividend Yield	1.67%
5 years performance	15.04%	Covid-19 Performance	-28.82%
Annual costs	0.06% p.a.

 

#2 iShares Core Dividend Growth ETF

iShares Core Dividend Growth ETF
Ticker	DGRO	Criteria	Yield
Benchmark	Morningstar U.S. Dividend Growth Index	Weighting	Dividends
Holdings	411	Dividend Yield	2.33%
5 years performance	15.40%	Covid-19 Performance	-32.46%
Annual costs	0.08% p.a.

 

#1 WisdomTree U.S. Dividend Growth ETF

WisdomTree U.S. Dividend Growth ETF
Ticker	DGRW	Criteria	Yield
Benchmark	WisdomTree U.S. Quality Dividend Growth Index	Weighting	Dividends
Holdings	266	Dividend Yield	1.93%
5 years performance	16.33%	Covid-19 Performance	-29.35%
Annual costs	0.28% p.a.

 

Data retrieved from etf.com & Morningstar on 24/12/2021. Below is more data on the five dividend ETFs discussed and the option to download to an excel-file format.