"SDY ETF is a widely-used dividend investment option, promising passive income. However, one might wonder if it ranks supreme amongst similar choices."
In the world of exchange-traded funds (ETFs), investors have a wide variety of options to choose from, including low-fee index funds and dividend-focused ETFs. One such ETF that has gained popularity is the SPDR S&P Dividend ETF (SDY), which focuses on dividend growers. However, several other dividend-focused ETFs show strong performance and varying yield-growth profiles suitable for different investor preferences.
The SPDR S&P Dividend ETF (SDY) currently yields 2.59% and has performed exceptionally well, with an average annualized gain of 11.34% over the past 5 years and 9.24% over the past 10 years. The ETF's quarterly payout in June 2025 was $0.927 per share, up from $0.68 in June 2020 and $0.503 in June 2015. As of June 24, 2025, the SPDR S&P Dividend ETF held positions in 149 companies, with its top 10 holdings making up about 18% of its total value.
Compared to the SPDR S&P Dividend ETF (SDY), several other ETFs stand out. The Vanguard High Dividend Yield ETF (VYM) currently yields 2.86%, offering a higher current yield than SDY but with slightly lower dividend growth emphasis. The Vanguard Dividend Appreciation ETF (VIG) currently yields 1.79%, focusing on dividend growth companies with a record of increasing dividends and delivering superior long-term returns compared to VYM.
Another ETF to consider is the First Trust Rising Dividend Achievers ETF (RDVY), which currently yields 1.67% and has shown strong recent returns. The iShares Core Dividend Growth ETF (DGRO) currently yields 2.23%, offering a blend of growth and yield with competitive returns.
Moreover, international dividend ETFs have shown substantial gains in the first half of 2025, with some far outperforming domestic ETFs like SDY. For instance, the First Trust STOXX European Select Dividend Index Fund (FDD) has risen by 37.2% in the first half of the year.
In sum, while the SPDR S&P Dividend ETF (SDY) remains a solid choice for dividend growth investing, other ETFs like VYM and VIG may offer better yields or growth profiles depending on the investor’s income vs. growth preference. Additionally, international dividend ETFs and other strategies present alternative opportunities with potentially higher returns but different risk factors.
It's essential to remember that while ETFs can be a powerful tool for building wealth, they are not without risk. As always, it's crucial to do thorough research and consider consulting a financial advisor before making investment decisions.
[Sources: 1][2][3]
[1] Morningstar. (2025). SPDR S&P Dividend ETF (SDY). Retrieved from https://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?t=SDY [2] Yahoo Finance. (2025). First Trust STOXX European Select Dividend Index Fund (FDD). Retrieved from https://finance.yahoo.com/quote/FDD/holdings?p=FDD [3] Vanguard. (2025). Vanguard High Dividend Yield ETF (VYM). Retrieved from https://personal.vanguard.com/us/funds/snapshot?FundId=0538&FV=all&Language=en-US
- Depending on one's income vs. growth preference, alternative ETFs like the Vanguard High Dividend Yield ETF (VYM) and the Vanguard Dividend Appreciation ETF (VIG) may offer better yields or growth profiles compared to the SPDR S&P Dividend ETF (SDY).
- International dividend ETFs, such as the First Trust STOXX European Select Dividend Index Fund (FDD), have shown substantial gains and have the potential for higher returns, but they also come with different risk factors compared to domestic ETFs like SDY.
