The U.S. Federal Reserve increased its key interest rate a total of 11 times between March 2022 and July 2023. And while the central bank hasn’t made additional increases lately – and some think it may even move toward cuts soon – the bottom line is that the current rate environment makes fixed-income instruments much more attractive than most dividend stocks.
Consider that the average yield of a stock in the S&P 500 index of the largest U.S. companies is just 1.7% at present, while 10-year U.S. Treasury bonds provide 4.7% or so.
As a result, finding the “best” dividend ETFs for your portfolio is a question of assets and strategy as much as it is a question of yield. There are some funds that pay well from an income perspective but don’t offer the same upside of dividend stocks, and some that pay more modest yield but come with a lot more stability.
The following seven ETFs all offer various ways to invest for yield, and provide a good look at the options out there for income-oriented investors right now:
| Dividend ETF | Assets under management | Expense ratio | Dividend yield |
| Vanguard Dividend Appreciation ETF (ticker: VIG) | $79 billion | 0.06% | 1.8% |
| Vanguard High Dividend Yield Index ETF (VYM) | $55 billion | 0.06% | 2.8% |
| Vanguard Real Estate ETF (VNQ) | $34 billion | 0.12% | 4% |
| iShares International Select Dividend ETF (IDV) | $4.2 billion | 0.51% | 6.6% |
| Global X SuperDividend ETF (SDIV) | $760… |
