Best Dividend ETFs in 2025 – Earn Passive Income & Growth

Best Dividend ETFs in 2025 – Earn Passive Income with Top Funds

ETFs
February 28, 2025

Why Invest in Dividend ETFs?

Dividend ETFs focus on companies that consistently pay dividends, providing investors with regular income while also offering capital appreciation. They are perfect for retirees, income-seekers, and conservative investors who want steady cash flow with lower risk.

✅ Key Benefits of Dividend ETFs:

Reliable Passive Income – Regular dividend payouts, usually quarterly or monthly
Lower Risk & Volatility – Dividend-paying companies tend to be more stable
Compounding Effect – Reinvesting dividends leads to faster portfolio growth
Diversification – Exposure to multiple high-yield stocks

Top 5 Dividend ETFs for 2025

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

✅ Expense Ratio: 0.06%
✅ Dividend Yield: 3.5%
✅ Top Holdings: Broadcom, Home Depot, Coca-Cola
Why Invest? SCHD offers strong dividend growth, capital appreciation, and a low expense ratio.

2️⃣ Vanguard High Dividend Yield ETF (VYM) – Best for Long-Term Investors

✅ Expense Ratio: 0.06%
✅ Dividend Yield: 3.2%
✅ Top Holdings: Johnson & Johnson, JPMorgan Chase, ExxonMobil
Why Invest? VYM invests in large-cap dividend stocks, making it a great long-term income investment.

3️⃣ iShares Select Dividend ETF (DVY) – Best for High-Yield Dividends

✅ Expense Ratio: 0.38%
✅ Dividend Yield: 4.0%
✅ Top Holdings: Chevron, IBM, Verizon
Why Invest? DVY provides higher dividend payouts with a strong track record of performance.

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

✅ Expense Ratio: 0.35%
✅ Dividend Yield: 2.9%
✅ Top Holdings: Procter & Gamble, AT&T, 3M
Why Invest? SDY invests in Dividend Aristocrats – companies that have increased dividends for 25+ consecutive years.

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

✅ Expense Ratio: 0.30%
✅ Dividend Yield: 4.5%
✅ Top Holdings: Philip Morris, Duke Energy, Pfizer
Why Invest? SPHD is perfect for investors looking for high yield with lower risk.