Best Dividend ETFs to Invest in 2024
In recent years, people have started to invest in exchange-traded funds (ETFs) that focus on dividends, as they allow them to get regular income while at the same time being invested in the stock market. However, as every industry is subject to change, financial opportunities for investors are offering the best market for dividend ETFs in 2024. Such funds will likely offer investors long-term capital appreciation, a reasonable income stream, and diversification benefits to reduce investment risks. In the following paragraphs, we will discuss the best dividend ETFs for 2024 and look at key aspects of why their growth is worth investing in for the future.
Let’s start by understanding Dividend ETFs and what they are all about.
To simplify, dividend exchange-traded funds comprise stocks of companies that pay dividends, allowing investors to earn fixed income. As many investors expect consistent returns, dividend-paying investment strategies seem more appealing than the rest. Dividend ETFs have proven to be the most popular of these strategies.
Reason for Investing in Dividend ETFs: Understanding the Earning Potential
There are numerous appealing features of dividend ETFs. Such assets enable them to earn cash flow from their investments. Also, they offer a wide range of services because risks are distributed among firms in various industries. Moreover, it can be rightly assumed that such ETFs, which pay dividends, are less risky as they comprise large and well-established firms relative to other categories of stock investments.
How to Choose the Best Dividend ETFs for Investment in 2024
Several criteria must be considered when searching for the best dividend ETFs, and caution must be addressed when looking for such investments in 2024. – The Signals, Ranking, Cost Ratio, and Trustworthiness of the ASIC Manager. Furthermore, evaluating the ETF concerning its dividend distribution calendar would also be relevant, as some ETFs pay monthly dividends, while others pay them once every few quarters or annually. These considerations are crucial because they help you determine which ETFs suit your strategies.
Vanguard Dividend Appreciation ETF (VIG)
For many investors, the Vanguard Dividend Appreciation ETF (VIG) is perhaps the most well-known dividend ETF as it mainly targets businesses with a record of increasing their dividends regularly. Reinvesting in companies that demonstrate consistent growth is the main goal of the ETF, which aims to provide both income and appreciation of capital. This shift from high dividend yield to increasing dividend reinvestment makes VIG a good long-term investment for investors looking to grow their net worth over time.
Schwab U.S. Dividend Equity ETF (SCHD)
Regarding paying dividends, the companies that SCHD targets have a high dividend payment history, which means that it is also a strong candidate for 2024 earnings. Note that SCHD pays dividends only to US companies with a good annual dividend history. Most investors who may want to earn some dividend income but do not want too much excess risk are likely to find SCHD appealing because of its reasonable expense ratio and its broad base of companies. It is also attributed to solid performance, which is why it’s regarded as one of the most reputable dividends ETFS that provides ROI to even those who do not want to risk a lot.
iShares Select Dividend ETF (DVY)
Those interested in higher yields on dividend ETFs may try the iShares Select Dividend ETF (DVY). DVY is focused on investing in dividend-paying stocks and has a higher yield than others. This type of ETF is best for those investors who are not very keen on the growth of the funds and value cash flow more. Since it is based in the USA, DVY invests in US industries such as utilities, financials, and consumer goods, which are well-known for distributing dividends.
SPDR S&P Dividend ETF (SDY)
On the other hand, the SDY is designed to track companies included in the S&P High Yield Dividend Aristocrats Index, which has a distinct requirement of a clutch of companies that have consecutively increased dividends for at least the last 20 years. This ETF provides investment in blue-chip companies that are quite high in quality and are focused on giving returns to the investors. For those investors who care about stability in the long run, balanced returns, and income growth, SDY would be an ideal ETF.
Invesco High Yield Equity Dividend Achievers ETF (PEY)
For investors searching for a reasonable income level through higher-yielding dividend equities, the Invesco High Yield Equity Dividend Achievers ETF would be an appealing alternative. This ETF targets companies with a track record of paying and increasing dividends over time. However, it also lowers the emphasis on points that matter for investors who seek income through such strategies. Investors who desire income and defensive stances within their portfolio can consider investing in PEY as it has exposure to utilities and consumer staples sectors.
Global X SuperDividend ETF (SDIV)
The Global X SuperDividend ETF (SDIV) brings a collection of high-dividend companies from various parts of the world. For those who seek high yields and don’t mind foreign risks, SDIV appears to be a good investment vehicle, as it will be able to pay overage yields on both the U.S. and international fronts. Hence, It supports any investor who is looking for some sort of income.
Vanguard High Dividend Yield ETF- VYM
The Vanguard High Dividend Yield ETF (VYM) provides an income through exposure to mega dividend-paying companies; it’s more focused on large-cap US stocks of VYM, which have higher than normal dividend yields. There seems to be a large group of investors who would not mind the low expense ratio and diversification of VYM markets to better dividend earnings and capital appreciation in the long run. In 2024, it would be interesting to acquire this ETF as it displayed a strong performance and timely dividend payment, which made the best of investing in dividends.
WisdomTree U.S. High Dividend Fund (DHS)
The WisdomTree U.S. High Dividend Fund (DHS) is focused on high-paying US dividend stocks. As this ETF invests in companies that have the habit of paying high dividends, it seems to be appealing to income-oriented investors. DHS also offers a mix of sectors, such as utilities, healthcare, and financials, regarded as constant dividend payers. 9. ProShares S&P 500 Dividend Aristocrats ETF (NOBL) The ProShares S&P 500 Dividend Aristocrats ETF (NOBL) is focused on the S&P 500 components that have paid increasing dividends for at least 25 consecutive years. NOBL allows investors to invest in some of the most consistent dividend-paying stocks. For those investors looking for consistent returns along with income, the particular funds seek companies with a history of increasing dividends.
iShares Core Dividend Growth ETF (DGRO)
The I-Shares Core Dividend Growth ETF (DGRO) is a good option for investors willing to wait. This is because DGRO targets firms with a history of increasing their dividends, thereby ensuring growth. One of the best dividend exchange-traded funds (ETFs) to acquire for those who want to generate wealth is DGRO because of its low expense ratio and diversified portfolio while also paying out regular dividends.
SPDR Portfolio S&P 500 High Dividend ETF (SPYD)
The overwhelming focus is on high-dividend stocks in the SPDR Portfolio S&P 500 High Dividend ETF (SPYD). Unlike many passive dividend ETFs, SPYD has a higher yield and can be ideal for those seeking passive income. SPYD will likely be among the best dividend ETFs to invest in 2024 owing to its large-cap focus on US-based companies, which allows the fund to be stable and diversified.
First Trust Rising Dividend Achievers ETF (RDVY)
Dividends were credited to a global economy portfolio when the First Trust Rising Dividend Achievers ETF (RDVY) was launched. Our focus is growth and income from US companies whose fundamentals are strong and predictable, and we believe First Trust is well suited to help us meet our objectives. The strategy of this ETF emphasizes the growth of dividends, not the high current yield of the dividends.
Global X U.S. Preferred ETF (PFFD)
However, PFFD invests in US firms with these preferred shares, so this is an ETF to buy for investors who want to know the performance of common and preferred shares of US companies. The preferred shares issued take precedence over common shares and, therefore, have the second highest risk compared to common shares. This strategy allows PFFD to especially benefit clients who prefer an income-producing portfolio that invests in varieties of yield greater investments and is still diversified.
iShares International Select Dividend ETF (IDV)
For those seeking international investments, IDV is the target to help you with the core outlay as it is targeted in countries outside the US. IDV zeroes in on large, established, and stable firms in developed regions to generate revenue and achieve diversification. This yields a greater investment option for those also searching for international dividends, as it allows them to earn from outside the US.
VanEck Vectors Morningstar International Moat ETF (MOTI)
The primary goal of the VanEck Vectors Morningstar International Moat ETF (MOTI) is to invest in both American and foreign firms that have competitive advantages, also called economic moats. It is worth mentioning that although it is not a pure dividend ETF, many firms in its portfolio do pay dividends. Investors can combine income and growth potential through this dividend ETF, which will surely be one of the top dividend ETFs for 2024.
Conclusion
Dividend-paying ETFs are a good investment for people looking for an above-average steady income with equity capital appreciation. In essence, the strategies of these ETFs allow investors to earn a steady income from dividend-paying stocks while reducing some risks present in picking individual stocks. There is a good selection of the best dividend ETFs for growth in 2024 and beyond, high-yield or dividend growth ETFs, and many others that will suit all investor’s preferences. If you’re an investor in US or foreign companies, there is a dividend ETF that can fit your criteria.
