What exactly is a dividend ETF?

A dividend ETF is an exchange-traded fund that specifically invests in companies known for regularly paying dividends to shareholders. Unlike individual stocks, these ETFs contain a collection of dividend-paying companies, providing you with instant diversification. When these companies distribute profits to shareholders, the ETF passes those payments to you as dividends. This creates a steady income stream while giving you exposure to multiple companies in a single investment.

How often do dividend ETFs pay income to investors?

Dividend ETF payment schedules vary, but most distribute income quarterly (four times per year). Some ETFs might pay monthly or follow other schedules depending on their strategy. The ETF collects all dividends from the companies it holds and then distributes them to ETF shareholders according to their payment calendar. You can typically find the payment schedule in the ETF's prospectus or on the fund provider's website.

What is dividend yield and why is it important?

Dividend yield is the annual dividend payment expressed as a percentage of the current share price. For example, if an ETF trading at $100 pays $3 in dividends per year, it has a 3% dividend yield. This metric helps you compare the income potential of different investments regardless of their price. Higher yields offer more current income, but extremely high yields might indicate risk or unsustainability. When evaluating dividend ETFs, yield is an important factor, but should be considered alongside other aspects like dividend growth history and overall performance.

What is a REIT ETF and how is it different?

A REIT (Real Estate Investment Trust) ETF, like the Global X SuperDividend REIT ETF in this collection, invests specifically in companies that own, operate, or finance income-producing real estate properties. What makes REIT ETFs special is that they give you exposure to real estate markets without requiring you to directly buy property. REITs are required by law to distribute at least 90% of their taxable income to shareholders as dividends, which often results in higher yields compared to other dividend ETFs. This provides a way to add real estate exposure and potentially higher income to your investment portfolio.

Why would I choose international dividend ETFs over US-only options?

International dividend ETFs, like some in this collection, offer geographical diversification by investing in dividend-paying companies outside the United States. This approach provides several potential benefits: exposure to different economic cycles (when the US market struggles, other markets might perform well), access to industries that might be more developed in other countries, and potentially higher dividend yields in certain international markets. While international investments come with additional considerations like currency fluctuations and geopolitical factors, they can be an effective way to diversify your income sources beyond the US market.

5 handpicked stocks

Dividend ETFs

These carefully selected ETFs regularly share their profits with you. Handpicked by our professional analysts, they offer a smart way to earn consistent income while investing across multiple companies at once.

Han Tan | Market Analyst

Published on May 11

Top Picks from This Group

Here are a few of the assets in this group. Create an account to unlock the full list.

Global X SuperDividend US ETF

DIV

Current price

$17.67

iShares Core Dividend ETF

DIVB

Current price

$52.16

SPDR S&P International Dividend ETF

DWX

Current price

$42.83

Global X SuperDividend REIT ETF

SRET

Current price

$21.84

SPDR S&P GLOBAL DIVIDEND ETF

WDIV

Current price

$72.84

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About This Group of Stocks

Our Expert Thinking

Dividend ETFs combine the diversification of ETFs with steady income potential. They're designed for investors seeking regular payments while gaining exposure to multiple dividend-paying companies across various markets and sectors in a single investment.

What You Need to Know

ETFs work like stocks but contain a basket of companies, making them perfect for beginners unsure about picking individual stocks. Dividend ETFs specifically focus on companies with consistent payment histories, providing both income and growth potential.

Why These Stocks

These particular ETFs were selected for their reliable dividend histories and diverse market exposure. They represent different approaches to dividend investing—from US-focused to international, REITs, and global markets—offering you consistent income opportunities.

Why You'll Want to Watch These Stocks

💰

Regular Income Potential

These ETFs are designed to pay you regularly, creating a stream of passive income that arrives whether markets go up or down. They're like getting paid while you own them.

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Global Opportunities in One Click

Why limit yourself to one market? These ETFs give you access to dividend payers across the US and international markets, all without having to research individual foreign stocks.

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Real Estate Income Without the Hassle

The REIT ETF lets you become a real estate investor without dealing with tenants, repairs, or massive down payments. Collect potential rental-like income with the simplicity of buying a stock.

Get the full story on this Basket. Read our detailed article on its risks and potential.

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