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
- Invesco KBW High Dividend Yield Financial ETF (KBWD)
- WBI Power Factor High Dividend ETF (WBIY)
- Fidelity High Dividend ETF (FDVV)
- AAM S&P 500 High Dividend Value ETF (SPDV)
- Vanguard High Dividend Yield ETF (VYM)
- Columbia Research Enhanced Value ETF (REVS)
- Schwab US Dividend Equity ETF (SCHD)
| ETF | What it Tracks | Dividend Yield Trailing 12-month | Expense Ratio |
| Invesco KBW High Dividend Yield Financial ETF (KBWD) | KBW Nasdaq Financial Sector Dividend Yield Index | 7.62% | 1.24% |
| WBI Power Factor High Dividend ETF (WBIY) | Solactive Power Factor High Dividend Index | 3.94% | 0.29% |
| Fidelity High Dividend ETF (FDVV) | Fidelity High Dividend Index | 2.1% | 0.29% |
| AAM S&P 500 High Dividend Value ETF (SPDV) | S&P 500 Dividend and Free Cash Flow Yield Index | 3.18% | 0.29% |
| Vanguard High Dividend Yield ETF (VYM) | FTSE High Dividend Yield Index | 3.45% | 0.06% |
| Columbia Research Enhanced Value ETF (REVS) | Beta Advantage® Research Enhanced U.S. Value Index | 1.23% | 0.19% |
| Schwab US Dividend Equity ETF (SCHD) | Dow Jones U.S. Dividend 100™ Index | 2.89% | 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.
| Sector | Weightings |
| Financial Services | 62.25% |
| Real Estate | 35.95% |
| Industrials | 1.8% |
Top Holdings
KBWD invests in 40 securities which is pretty reasonable for a niche-focused equity fund. The fund’s top holdings include;
| Company | Weighting |
| Orchid Island Capital, Inc | 5.70% |
| Newtek Business Services Corp | 4.28% |
| FS KKR Capital Corp | 3.97% |
| ARMOUR Residential REIT | 3.89% |
| Prospect Capital Corp | 3.80% |
| Annaly Capital Management Inc | 3.74% |
| Goldman Sachs BDC Inc | 3.60% |
| Chimera Investment Corp | 3.55% |
| TCG BDC Inc | 3.51% |
| New Mountain Finance | 3.48% |
Performance against KBW Nasdaq Financial Sector Dividend Yield Index (Benchmark)
| Returns | Invesco KBW High Dividend Yield Financial ETF | Nasdaq Financial Sector Dividend Yield Index (Benchmark) |
| 1 year | 71.17 | 71.93 |
| 3 year | 8.52 | 8.44 |
| 5 year | 8.87 | 8.78 |
| 10 year | 8.54 | 8.73 |
As you can see, the performance has closely matched the base’s index performance over the years.
5-Year Return
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 Services | 65.74% |
| Real Estate | 32.61% |
| Industrials | 1.65% |
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)
| Returns | WBI Power Factor High Dividend ETF (WBIY) | Solactive Power Factor High Dividend Index |
| 1-year | 49.08 | 49.55 |
| 3- year | 14 | 14.31 |
| 5-year | 13.76 | 14.1 |
The fund has maintained a stable performance against the base index over the last 5 years.
5-year Returns
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;
| Company | Allocation |
| AbbVie Inc | 6.54% |
| Verizon Communications Inc | 6.10% |
| Dow Inc | 5.93% |
| Philip Morris International Inc | 5.49% |
| Southern Company | 4.90% |
| Newmont Corp | 4.94% |
| Kraft Heinz Co | 4.67% |
| Cardinal Health Inc | 4.63% |
| Lyondellbasell Industries | 4.54% |
| International Business Machines | 4.03% |
Sector Allocation
| Sector | Weighting |
| Basic Materials | 5.62% |
| Consumer Cyclical | 6.28% |
| Financial Services | 22.11% |
| Consumer Defensive | 20.16% |
| Healthcare | 15.62% |
| Utilities | 7.70% |
| Communication Services | 12.37% |
| Energy | 0.55% |
| Industrials | 1.11% |
| Technology | 8.48% |
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
| Company | Weightings |
| Microsoft Corp | 5.19% |
| Apple Inc | 4.84% |
| JPMorgan Chase | 2.58% |
| Bank of America Corp | 2.51% |
| Exxon Mobil Corp | 2.50% |
| Blackstone Inc | 2.42% |
| Chevron Corp | 2.28% |
| Wells Fargo & Co | 2.28% |
| Procter & Gamble Co | 2.18% |
| ONEOK Inc | 2.14% |
Holdings Breakdown
| Stocks | Allocation |
| Financials | 19.95% |
| Technology | 19.15% |
| Real Estate | 12.30% |
| Energy | 11.79% |
| Utilities | 10.28% |
| Basic Material | 9.14% |
| Health Care | 6.27% |
| Consumer Cyclical | 5.28% |
| Communication | 2.62% |
| Industrials | 1.88% |
| Consumer Defensive | 0.50% |
Performance of Fidelity High Dividend ETF against the Base Index
| Returns | Fidelity High Dividend Yield ETF | Fidelity High Dividend Index |
| 1-Year | 49.08 | 49.55 |
| 3-Year | 14 | 14.31 |
| 5-Year | 13.76 | 14.1 |
5-Year Returns
From the chart, the NAV has been growing since 2020.
Sector Allocation
| SECTOR | Weighting |
| Technology | 18.61% |
| Financial Services | 18.57% |
| Energy | 13.27% |
| Real Estate | 12.64% |
| Utilities | 10.99% |
| Basic Materials | 9.31% |
| Healthcare | 6.44% |
| Consumer Cyclical | 5.10% |
| Communication Services | 2.62% |
| Industrials | 1.92% |
| Consumer Defensive | 0.53% |
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
| Company | Allocation |
| Coterra Energy Inc | 2.43% |
| CF Industries Holdings Inc | 2.42% |
| Simon Property Group Inc | 2.36% |
| Regions Financial Corp | 2.24% |
| HP Inc | 2.24% |
| People’s United Financial Inc | 2.13% |
| Marathon Petroleum Corp | 2.09% |
| Baker Hughes Company | 2.08% |
| Principal Financial Group Inc | 2.08% |
| Tyson Foods Inc | 2.08% |
3-Year Performance
Performance of the AAM High Dividend Value ETF Against the Benchmark
| Returns | AAM High Dividend Value ETF | S&P 500 Dividend and Free Cash Flow Yield Index |
| 1-Year | 46.23 | 46.89 |
| 3-Year | 9.14 | 9.50 |
| 5-Year | – | 10.48 |
Sector Allocation
| Sector | Weighting |
| Financial Services | 11.20% |
| Healthcare | 10.37% |
| Industrials | 10.20% |
| Consumer Cyclical | 9.67% |
| Consumer Defensive | 9.54% |
| Communication Services | 9.50% |
| Real Estate | 8.58% |
| Basic Materials | 8.42% |
| Utilities | 8.33% |
| Energy | 7.80% |
| Technology | 6.38% |
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
| Returns | Vanguard High Dividend Yield ETF | S&P 500 Dividend and Free Cash Flow Yield Index |
| 1-Year | 40.55 | 40.61 |
| 3-Year | 12.84 | 12.86 |
| 5-Year | 12.30 | 12.34 |
| 10-Year | 13.00 | 13.06 |
5-year performance
Top Holdings
| Company | Allocation |
| JPMorgan Chase | 3.68% |
| Johnson & Johnson | 3.13% |
| Home Depot Inc | 2.89% |
| Bank of America Corp | 2.58% |
| Procter & Gamble Co | 2.54% |
| Exxon Mobil Corp | 1.99% |
| Pfizer Inc | 1.87% |
| Cisco Systems Inc | 1.73% |
| Comcast Corp | 1.71% |
| PepsiCo Inc | 1.63% |
Sector Allocation
| Sector | Weighting |
| Financial Services | 22.05% |
| Consumer Defensive | 14.13% |
| Healthcare | 13.61% |
| Industrials | 10.14% |
| Technology | 9.77% |
| Utilities | 7.27% |
| Energy | 7.12% |
| Communication Services | 5.91% |
| Consumer Cyclical | 5.57% |
| Basic Materials | 4.41% |
| Real Estate | 0.02% |
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
| Returns | Columbia Research Enhanced Value ETF | Beta Advantage® Research Enhanced U.S. Value Index. |
| 1-Year | 19.23% | 19.52% |
1-Year Return
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.
| Company | Allocation |
| Wells Fargo & Co | 3.84% |
| Johnson & Johnson | 3.75% |
| Exxon Mobil Corp | 3.67% |
| Procter & Gamble Co | 2.48% |
| Pfizer Inc | 2.23% |
| Morgan Stanley | 2.22% |
| Citigroup Inc | 2.16% |
| Alphabet Inc Class A | 1.96% |
| Cisco Systems Inc | 1.94% |
| Goldman Sachs Group Inc | 1.90% |
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 Services | 19.64% |
| Healthcare | 18.26% |
| Industrials | 12.09% |
| Technology | 8.77% |
| Communication Services | 7.30% |
| Energy | 7.24% |
| Consumer Defensive | 7.13% |
| Consumer Cyclical | 5.39% |
| Utilities | 5.21% |
| Real Estate | 5.15% |
| Basic Materials | 3.83% |
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
| Returns | Schwab US Dividend Equity ETF | Dow Jones U.S. Dividend 100™ Index |
| 1 Year | 17.87 | 18 |
| 3 Year | 18.03 | 18.14 |
| 5 Year | 15.01 | 15.11 |
| 10 Year | 14.29 | 14.41 |
5-Year 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.
| Name | Percent of Assets (%) |
| COCA-COLA | 4.54% |
| AMGEN INC | 4.49% |
| VERIZON COMMUNICATIONS INC | 4.43% |
| MERCK & CO INC | 4.34% |
| PEPSICO INC | 3.99% |
| CISCO SYSTEMS INC | 3.98% |
| BROADCOM INC | 3.96% |
| LOCKHEED MARTIN CORP | 3.96% |
| INTERNATIONAL BUSINESS MACHINES CO | 3.90% |
| PFIZER INC | 3.82% |
Sector Allocation
| SECTOR | % Weighting |
| Financial Services | 20.98% |
| Industrials | 18.26% |
| Technology | 15.54% |
| Consumer Defensive | 14.90% |
| Healthcare | 13% |
| Consumer Cyclical | 6.92% |
| Communication Services | 5.38% |
| Basic Materials | 2.69% |
| Energy | 2.33% |
| Real Estate | 0% |
| Utilities | 0% |
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.
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Frequently Asked Questions
Which Vanguard ETF pays the highest dividend?
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.
Are dividend ETFs good for the long term?
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.
Where to buy dividend ETFs?
You can buy dividend ETFs through a brokerage account. Click here for our guide to how to buy ETFs.
