2 High-Yield Dividend ETFs I Would Buy Right Now and Why
Key Points
Dividend stocks and ETFs have staged an impressive comeback in 2026.
Among those performing best this year are some previous laggards that have been largely forgotten.
These two dividend ETFs offer portfolios that are very different from both the S&P 500 and the typical dividend stock portfolio.
- 10 stocks we like better than SPDR Series Trust - State Street SPDR S&P Dividend ETF ›
Dividend exchange-traded funds (ETFs) are finally making a comeback in 2026 and it can't come quick enough for some.
After a comparatively strong 2022, which saw some dividend ETFs outperform the S&P 500 by 10% or more, it's been mostly misery ever since. The WisdomTree U.S. Total Dividend ETF, which I like to use as a pseudo-proxy for the entire dividend stock universe, was up 50% total from 2023 to 2025, well behind the 86% return for the Vanguard S&P 500 ETF over the same period.
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But the rotation this year into value, low volatility, and defensive stocks has benefited dividend payers as much as anybody, including some that have had a miserable few years but are rising from the ashes in 2026.
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1. State Street SPDR S&P Dividend ETF
The State Street SPDR S&P Dividend ETF (NYSEMKT: SDY) is one of the strongest combinations of dividend growth and yield. Its index targets companies with a 20-plus-year track record of annual dividend growth and weights the resulting portfolio by dividend yield. It offers a current yield of 2.4%.
Dividend growers as a whole aren't really high yielders, so I can understand a strategy that tries to maximize the income potential from this group. The top four sector holdings are what you might expect from a dividend growth strategy: industrials (19%), consumer staples (18%), utilities (15%), and financials (12%). Energy and technology only have mid-single-digit allocations.
This portfolio is hitting a lot of the areas that are performing well this year and its deep-value style (the fund has a forward price-to-earnings (P/E) ratio of just 18) has been getting a real tailwind.
2. Invesco S&P 500 High Dividend Low Volatility ETF
The Invesco S&P 500 High Dividend Low Volatility ETF (NYSEMKT: SPHD) starts by identifying the 75 stocks from the S&P 500 with the highest dividend yield over the past 12 months and then pulling out the 50 stocks from that group with the lowest realized volatility over the past year. It has a current yield of 4.5%.
Given that this fund's strategy focuses on dividend yield first before considering the volatility factor, this is more of a pure income play. Because it doesn't exclude real estate investment trusts (REITs) right off the top in the way that some dividend ETFs do, this sector accounts for 20% of the portfolio. Other top sectors include consumer staples (20%), financials (14%), utilities (14%), and energy (13%). That makes this fund very well diversified, although it does have a unique twist: There's not a single tech stock to be found in the portfolio.
If you're considering dividend stocks for your portfolio and you want to look beyond the popular names, such as the Vanguard Dividend Appreciation ETF, these two are worth considering. Their strategies produce portfolios very different from what investors are probably used to, but that can be a good thing.
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David Dierking has positions in Invesco Exchange-Traded Fund Trust II-Invesco S&P 500 High Dividend Low Volatility ETF and Vanguard Dividend Appreciation ETF. The Motley Fool has positions in and recommends Vanguard Dividend Appreciation ETF and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.
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