7 Best Dividend ETFs: Singapore Investors Must Watch [2022]

Advertisement

7 Best Dividend ETFs For Singapore Investors to Watch Out For!

Articles written are independent opinions, and are not affiliated/sponsored unless specifically mentioned.

best dividend etfs

Table of Contents

Dividend stocks are great investments because they pay out regular dividends.

They also tend to outperform other types of stock over time.

However, dividend stocks have high risk – something not many dividend investors can stomach.

Therefore, we’ve decided to compile the best dividend ETFs right now for dividend fanatics out there!

This list looks at both dividend yields and capital gains you can expect from your investments.

Read on.

7 Best Dividend ETFs for Singapore Investors

ETFWhat it TracksDividend Yield Trailing 12-monthExpense Ratio
Invesco KBW High Dividend Yield Financial ETF (KBWD)KBW Nasdaq Financial Sector Dividend Yield Index7.62%1.24%
WBI Power Factor High Dividend ETF (WBIY).Solactive Power Factor High Dividend Index3.94%0.29%
Fidelity High Dividend ETF (FDVV)Fidelity High Dividend Index2.1%0.29%
AAM S&P 500 High Dividend Value ETF (SPDV)S&P 500 Dividend and Free Cash Flow Yield Index3.18%0.29%
Vanguard High Dividend Yield ETF (VYM)FTSE High Dividend Yield Index3.45%0.06%
Columbia Research Enhanced Value ETF (REVS)Beta Advantage® Research Enhanced U.S. Value Index1.23%0.19%
Schwab US Dividend Equity ETF (SCHD)Dow Jones U.S. Dividend 100™ Index2.89%0.06%

1. Invesco KBW High Dividend Yield Financial ETF (KBWD)

Invesco KBW High Dividend Yield Financial ETF was founded in 2021 and currently has a market capitalisation of $492.97 million.

Its main objective is to track the investment results of the KBW Nasdaq Financial Sector Dividend Yield Index which comprises firms in the financial sector. The fund aims to invest at least 90% of its assets in the securities comprising the base index.

As the name suggests KBWD is a high-yielding dividend fund that offers investors a dividend yield of 7.62% over a trailing 12-month period and possible capital gains.

In absolute terms, the dividend yield is higher compared to the financial industry and broad-based equity indexes. For example, the current 12-month trailing dividend yield for S&P 500 and Vanguard Total Stock Market ETF is 1.44% and 2.85% respectively.

Even though the expense ratio currently stands at 1.24 % which is higher than most funds, it has maintained a low management fund of 0.35%.

The fund focuses on small to medium cap firms, REITs, and financial institutions or banks.

SectorWeightings
Financial Services62.25%
Real Estate35.95%
Industrials1.8%

Top Holdings

KBWD invests in 40 securities which is pretty reasonable for a niche-focused equity fund. The fund’s top holdings include;

CompanyWeighting
Orchid Island Capital, Inc5.70%
Newtek Business Services Corp4.28%
FS KKR Capital Corp3.97%
ARMOUR Residential REIT3.89%
Prospect Capital Corp3.80%
Annaly Capital Management Inc3.74%
Goldman Sachs BDC Inc3.60%
Chimera Investment Corp3.55%
TCG BDC Inc3.51%
New Mountain Finance3.48%

Performance against KBW Nasdaq Financial Sector Dividend Yield Index (Benchmark)

ReturnsInvesco KBW High Dividend Yield Financial ETF Nasdaq Financial Sector Dividend Yield Index (Benchmark)
1 year71.1771.93
3 year8.528.44
5 year8.878.78
10 year8.548.73

As you can see, the performance has closely matched the base’s index performance over the years.

5-Year Return

KBWD ETF share performance

From 2021, the ETF’s NAV has been rising thanks to the growth of financial services and real estate sectors. Therefore this fund is a great option for investors seeking to put their money in financials ETFs.

Additionally, because it’s a passively managed ETF, you’ll get exposure to flexibility, low costs, and transparency. Therefore, it’s an excellent vehicle for long-term investment.

In my view, KBWD will perform better if interest grows since this is a key macro aspect that fuels growth in REITs and financial services industries. Ultimately, there will be high dividend yields for investors and robust capital gains.

Sector Allocation 

Sector% Weighting
Financial Services65.74%
Real Estate32.61%
Industrials1.65%

2. WBI Power Factor High Dividend ETF (WBIY)

The WBI Power Factor High Dividend ETF is an ETF that seeks to offer investment results that replicate the performance of the Solactive Power Factor High Dividend Index consisting of unique stocks with certain high-value characteristics.

What sets the WBIY from its peers is the Smart-Beta approach that ensures investors get maximum returns, consistent capital growth, and inflation protection. The process involves identifying the top 50 high-yielding stocks with top-value fundamentals.

The fund was founded on 29th December 2016 and currently has a market capitalisation of $65.60.

It has a trailing 12-month dividend yield of 3.94%, which is lower than the return for Invesco KBW High Dividend Yield Financial ETF.

In addition, unlike the KBWD which has a higher expense ratio value of 1.24%, WBIY has managed to keep its costs low at 0.29%.

Performance against Solactive Power Factor High Dividend Index (Benchmark)

ReturnsWBI Power Factor High Dividend ETF (WBIY)Solactive Power Factor High Dividend Index
1-year49.0849.55
3- year1414.31
5-year13.7614.1

The fund has maintained a stable performance against the base index over the last 5 years.

5-year Returns

WBIY ETF share performance

Looking at the chart, there has been growth in the NAV over the last year.

Top Holdings

The top 10 holdings of the WBIY includes;

CompanyAllocation
AbbVie Inc6.54%
Verizon Communications Inc6.10%
Dow Inc5.93%
Philip Morris International Inc5.49%
Southern Company4.90%
Newmont Corp4.94%
Kraft Heinz Co4.67%
Cardinal Health Inc4.63%
Lyondellbasell Industries4.54%
International Business Machines4.03%

Sector Allocation

SectorWeighting
Basic Materials5.62%
Consumer Cyclical6.28%
Financial Services22.11%
Consumer Defensive20.16%
Healthcare15.62%
Utilities7.70%
Communication Services12.37%
Energy0.55%
Industrials1.11%
Technology8.48%

3. Fidelity High Dividend ETF (FDVV)

Fidelity High Dividend ETF is also an ETF that seeks to offer investment results that correspond to the performance of the Fidelity High Dividend Index.

The base index comprises stocks of mid and large-cap high dividend-paying companies. Investing in these companies assures consistent and high dividend payouts.

The fund was launched on 12th September 2016 and has a relatively lower expense ratio of 0.29%. Its market capitalisation currently stands at $1.11B.

The last announced dividend is $0.21 against a dividend yield of 2.10% over a trailing 12-month period.

Top Holdings

CompanyWeightings
Microsoft Corp5.19%
Apple Inc4.84%
JPMorgan Chase2.58%
Bank of America Corp2.51%
Exxon Mobil Corp2.50%
Blackstone Inc2.42%
Chevron Corp2.28%
Wells Fargo & Co2.28%
Procter & Gamble Co2.18%
ONEOK Inc2.14%

Holdings Breakdown

StocksAllocation
Financials19.95%
Technology19.15%
Real Estate12.30%
Energy11.79%
Utilities10.28%
Basic Material9.14%
Health Care6.27%
Consumer Cyclical5.28%
Communication2.62%
Industrials1.88%
Consumer Defensive0.50%

Performance of Fidelity High Dividend ETF against the Base Index

ReturnsFidelity High Dividend Yield ETFFidelity High Dividend Index
1-Year49.0849.55
3-Year1414.31
5-Year13.7614.1

5-Year Returns

FDVV ETF share performance

From the chart, the NAV has been growing since 2020.

Sector Allocation

SECTORWeighting
Technology18.61%
Financial Services18.57%
Energy13.27%
Real Estate12.64%
Utilities10.99%
Basic Materials9.31%
Healthcare6.44%
Consumer Cyclical5.10%
Communication Services2.62%
Industrials1.92%
Consumer Defensive0.53%

4. AAM High Dividend Value ETF (SPDV)

AAM High Dividend Value ETF was launched on 28th November 2017. It seeks to provide investment results that replicate the performance of the S&P500 Dividend and Free Cash Flow Yield Index.

The total assets are $56.56 million and an expense ratio of 0.29%. Further, the current dividend rate for the fund is $0.99 and a 3.18% dividend yield over a trailing 12-month period.

The fund targets highly valued large-cap stocks exhibiting attractive dividend yield and consistent distribution traits.

At the heart of the fund’s transparent, tax-efficient, and low-cost strategy are 2 significant valuation metrics that aim to include such attractive stocks.

These include dividend yield and free cash flow yield metrics that represent a strong balance sheet position. Therefore this propels the SPDV to be among the top dividend stocks.

Top Holdings

CompanyAllocation
Coterra Energy Inc2.43%
CF Industries Holdings Inc2.42%
Simon Property Group Inc2.36%
Regions Financial Corp2.24%
HP Inc2.24%
People’s United Financial Inc2.13%
Marathon Petroleum Corp2.09%
Baker Hughes Company2.08%
Principal Financial Group Inc2.08%
Tyson Foods Inc2.08%

3-Year Performance

SPDV ETF share performance

Performance of the AAM High Dividend Value ETF Against the Benchmark

ReturnsAAM High Dividend Value ETF

S&P 500 Dividend and Free Cash Flow Yield Index

1-Year46.2346.89
3-Year9.149.50
5-Year10.48

Sector Allocation 

SectorWeighting
Financial Services11.20%
Healthcare10.37%
Industrials10.20%
Consumer Cyclical9.67%
Consumer Defensive9.54%
Communication Services9.50%
Real Estate8.58%
Basic Materials8.42%
Utilities8.33%
Energy7.80%
Technology6.38%

5. Vanguard High Dividend Yield ETF (VYM)

Vanguard High Dividend Yield ETF (VYM) seeks to track the performance of the FTSE High Dividend Yield Index comprising stocks from high dividend yield companies.

It was founded on 10th November 2006 and currently has a market capitalisation of $39.85 billion.

The latest announced dividend rate is $0.94 and a dividend yield of 3.45% with a 12-month trailing period.

Additionally, the fund has one of the lowest expense ratios and currently stands at 0.06%. As an investor, the ETF exposes you to stocks that offer high dividend yield via a single fund.

Performance of the Vanguard High Dividend Yield ETF against the benchmark

ReturnsVanguard High Dividend Yield ETF

S&P 500 Dividend and Free Cash Flow Yield Index

1-Year40.5540.61
3-Year12.8412.86
5-Year12.3012.34
10-Year13.0013.06

5-year performance

VYM ETF share performance

Top Holdings 

CompanyAllocation
JPMorgan Chase3.68%
Johnson & Johnson3.13%
Home Depot Inc2.89%
Bank of America Corp2.58%
Procter & Gamble Co2.54%
Exxon Mobil Corp1.99%
Pfizer Inc1.87%
Cisco Systems Inc1.73%
Comcast Corp1.71%
PepsiCo Inc1.63%

Sector Allocation

SectorWeighting
Financial Services22.05%
Consumer Defensive14.13%
Healthcare13.61%
Industrials10.14%
Technology9.77%
Utilities7.27%
Energy7.12%
Communication Services5.91%
Consumer Cyclical5.57%
Basic Materials4.41%
Real Estate0.02%

6. Columbia Research Enhanced Value ETF (REVS)

Columbia Research Enhanced Value ETF was launched on 25th September 2019 to seek investment returns that replicate the performance of the Beta Advantage® Research Enhanced U.S. Value Index. The ETF invests at least 80% of total assets in the securities of the base index.

Worth noting, the securities listed in the index are some of the highest dividend-yielding in the US.

The fund is domiciled in the US and is managed by Columbia Management Investment Advisers, LLC. and most of the stocks under this fund are from companies operating in diversified sectors.

The dividend rate currently stands at $0.25 with a dividend yield of 1.23% for a trailing 12-month period.

The fund has a market capitalisation of $21.57 million and a low fee structure with just 0.19% in annual expenses. This means a mere $19 per year on every $10,000 you invest.

Performance of the Columbia Research Enhanced Value ETF against the benchmark

ReturnsColumbia Research Enhanced Value ETF

Beta Advantage® Research Enhanced U.S. Value Index.

1-Year19.23%19.52%

1-Year Return

REVS ETF share performance

Top Holdings

This fund is fairly straightforward in its strategy and is mainly focused on some of the biggest names in the US as highlighted in the table below.

CompanyAllocation
Wells Fargo & Co3.84%
Johnson & Johnson3.75%
Exxon Mobil Corp3.67%
Procter & Gamble Co2.48%
Pfizer Inc2.23%
Morgan Stanley2.22%
Citigroup Inc2.16%
Alphabet Inc Class A1.96%
Cisco Systems Inc1.94%
Goldman Sachs Group Inc1.90%

Reliance on big stocks is a good idea if you want to reduce risk.

The top sectors for this ETF are Pharmaceuticals, Financial Service Providers(Banks) Oil Gas & Consumable Fuels.

Sector Allocation

SECTOR% Weighting
Financial Services19.64%
Healthcare18.26%
Industrials12.09%
Technology8.77%
Communication Services7.30%
Energy7.24%
Consumer Defensive7.13%
Consumer Cyclical5.39%
Utilities5.21%
Real Estate5.15%
Basic Materials3.83%

7. Schwab US Dividend Equity ETF (SCHD)

Last but not least is the Schwab US Dividend Equity ETF which currently boasts of a market capitalisation value of $138.57 billion.

Launched on 20th October 2011, the fund’s objective is to track the performance of the Dow Jones U.S. Dividend 100™ Index. It’s an excellent choice if you are looking for high-yielding equities.

One of the major highlights of this fund is that it’s a transparent and low-cost fund that exposes investors to a diversified portfolio.

Additionally, the base index it tracks focuses on top-quality and sustainable dividends. As well, it invests in stocks that exhibit fundamental strength based on financial ratios.

Performance of the Schwab US Dividend Equity ETF against the benchmark

ReturnsSchwab US Dividend Equity ETF Dow Jones U.S. Dividend 100™ Index
1 Year17.8718
3 Year18.0318.14
5 Year15.0115.11
10 Year14.2914.41

5-Year Performance

SCHD ETF share performance

Top Holdings

Presently, the ETF invests in top dividend pays such as Coca-Cola and Verizon Communications. Other top holdings are shown in the table below.

NamePercent of Assets (%)
COCA-COLA4.54%
AMGEN INC4.49%
VERIZON COMMUNICATIONS INC4.43%
MERCK & CO INC4.34%
PEPSICO INC3.99%
CISCO SYSTEMS INC3.98%
BROADCOM INC3.96%
LOCKHEED MARTIN CORP3.96%
INTERNATIONAL BUSINESS MACHINES CO3.90%
PFIZER INC3.82%

Sector Allocation 

SECTOR% Weighting
Financial Services20.98%
Industrials18.26%
Technology15.54%
Consumer Defensive14.90%
Healthcare13%
Consumer Cyclical6.92%
Communication Services5.38%
Basic Materials2.69%
Energy2.33%
Real Estate0%
Utilities0%

Conclusion

It is clear from the above analysis that there is no single best dividend ETF out there to invest in.

In fact, each investor has their own preferences when it comes to investing in funds – and some prefer more dividend payouts while some prefer more capital growth.

However, I hope that these recommendations have helped you with your investment choices.

Sign up for the best trading platform in Singapore for yourself and get investing!

Not sure how to invest?

Get help from a financial advisor instead.

Frequently Asked Questions

The Vanguard High Dividend Yield ETF (VYM), which has a yield of 3.45% and a 10-year track record of 13% in overall returns. This fund invests in stocks of large U.S. companies.

Dividend ETFs are great investments for the long term because they provide income from dividends paid out by stocks in the index. These ETFs not only provide you dividend payments but capital appreciation as well for you to grow your capital.

Exchange-traded funds also allow you to gain exposure to the entire market while reducing risk.

You can buy dividend ETFs through a brokerage account. Click here for our guide to how to buy ETFs.

Disclaimer: Each article written obtained its information from reliable sources and should be purely used for informational purposes only. The information provided by Singapore Financial Planners and its affiliated parties is not meant to be construed as financial advice. Singapore Financial Planners shall not be held liable for any inaccuracies, mistakes, omissions, and losses incurred should you act upon any information listed on this website. We recommend readers to seek financial planning advice from qualified financial advisors. 

Follow us here:

Other Useful Reads

Get Our Free Financial Planning E-book

Join over 1,000 Singaporeans in their financial planning journey!

Our Telegram channel is being enjoyed by over 100 individuals, don’t miss out!