Best Dividend ETFs in 2025 – High-Yield Passive Income

Best Dividend ETFs in 2025 – Earn Passive Income with High-Yield Investments

ETFs
February 28, 2025

Why Invest in Dividend ETFs?

Dividend ETFs are designed to generate steady income while offering the potential for long-term capital growth. These funds invest in companies with strong dividend histories, making them ideal for retirees, conservative investors, and those seeking financial stability.

Key Benefits of Dividend ETFs:
✅ Regular Passive Income – Earn dividends quarterly or monthly
✅ Lower Volatility – Less risk than high-growth stocks
✅ Diversification – Exposure to multiple dividend-paying companies
✅ Tax Efficiency – Some ETFs offer qualified dividends with lower tax rates

Top 5 Dividend ETFs for 2025

1️⃣ Schwab U.S. Dividend Equity ETF (SCHD) – Best Overall Dividend ETF

✅ Expense Ratio: 0.06%
✅ Dividend Yield: 3.5%
✅ Top Holdings: Coca-Cola, PepsiCo, Home Depot
Why Invest? SCHD tracks the Dow Jones U.S. Dividend 100 Index, focusing on high-quality dividend stocks.

2️⃣ Vanguard High Dividend Yield ETF (VYM) – Best for High-Yield Dividends

✅ Expense Ratio: 0.06%
✅ Dividend Yield: 3.8%
✅ Top Holdings: Johnson & Johnson, ExxonMobil, Procter & Gamble
Why Invest? VYM provides broad exposure to U.S. companies with above-average dividends.

3️⃣ iShares Select Dividend ETF (DVY) – Best for Stability & Low Risk

✅ Expense Ratio: 0.38%
✅ Dividend Yield: 3.6%
✅ Top Holdings: Verizon, Lockheed Martin, Chevron
Why Invest? DVY focuses on stable, mature companies with consistent dividends.

4️⃣ SPDR S&P Dividend ETF (SDY) – Best for Dividend Growth

✅ Expense Ratio: 0.35%
✅ Dividend Yield: 2.9%
✅ Top Holdings: 3M, AT&T, Caterpillar
Why Invest? SDY includes companies that have increased dividends for at least 25 consecutive years.

5️⃣ Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) – Best for Monthly Income

✅ Expense Ratio: 0.30%
✅ Dividend Yield: 4.2%
✅ Top Holdings: Philip Morris, Duke Energy, Southern Company
Why Invest? SPHD provides monthly dividends, making it ideal for income-focused investors.