Using Dividend ETFs For Income

October 21, 2019

Similar Returns

While strategies may differ, performance among the various dividend-focused ETFs this year has been similar. The top 10 best-performing dividend ETFs, for instance, have year-to-date returns ranging from 22% to 28.4%—not a huge spread.

The First Trust Dorsey Wright Momentum & Dividend ETF (DDIV) leads the pack. The fund bolstered its returns by picking dividend stocks with the best price momentum.

Meanwhile, the VictoryShares Dividend Accelerator ETF (VSDA) is another one on the list. It’s a fund that looks for dividend-growth stocks, but rather than look at history, it uses 15 fundamental and technical metrics to gauge which stocks will increase their payouts.

The aforementioned VIG, the largest dividend ETF of all, rounds out the top three on the best-performing dividend ETF list.

Best-Performing Dividend ETFs

Ticker Fund YTD Return (%)
DDIV  First Trust Dorsey Wright Momentum & Dividend ETF 28.35
VSDA  VictoryShares Dividend Accelerator ETF 25.63
VIG  Vanguard Dividend Appreciation ETF 23.88
RDVY  First Trust Rising Dividend Achievers ETF 23.38
TDIV  First Trust NASDAQ Technology Dividend Index Fund 23.26
IHDG  WisdomTree International Hedged Quality Dividend Growth Fund 23.09
LEAD  Reality Shares DIVCON Leaders Dividend ETF 22.99
DNL  WisdomTree Global ex-US Quality Dividend Growth Fund 22.78
YLDE  ClearBridge Dividend Strategy ESG ETF 22.50
DIVB  iShares U.S. Dividend and Buyback ETF 21.95


Strong Inflows

Dividend ETFs have seen solid inflows this year. The 10 most popular funds based on inflows have gathered a combined $14.9 billion on a year-to-date basis.

Unsurprisingly, VIG headlines the inflows list, with $3.4 billion of fresh cash from investors. The fund’s time-tested dividend growth strategy has resulted in solid gains, and that’s resonating with investors.

Another Vanguard fund, the aforementioned VYM—which tracks high-yield stocks—also makes the top inflows list, with creations of $1.8 billion. VYM is a favorite for those seeking solid yield that is almost double what you can get in the 10-year Treasury.

The iShares Core Dividend Growth ETF (DGRO), the First Trust Value Line Dividend Index Fund (FVD) and the Schwab U.S. Dividend Equity ETF (SCHD) round out the top five dividend flow recipients for 2019.


Dividend ETFs With The Largest Inflows

Ticker Fund YTD Inflows ($million)
VIG Vanguard Dividend Appreciation ETF 3,412
DGRO iShares Core Dividend Growth ETF 2,803
FVD First Trust Value Line Dividend Index Fund 2,798
VYM Vanguard High Dividend Yield ETF 1,848
SCHD Schwab U.S. Dividend Equity ETF 1,494
SPYD SPDR Portfolio S&P 500 High Dividend ETF 836
SPHD Invesco S&P 500 High Dividend Low Volatility ETF 700
DON WisdomTree U.S. MidCap Dividend Fund 467
DGS WisdomTree Emerging Markets SmallCap Dividend Fund 296
VYMI Vanguard International High Dividend Yield ETF 264


Email Sumit Roy at [email protected] or follow him on Twitter @sumitroy2

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