Should You Forget Growth ETFs and Invest in Dividend ETFs Instead?

2 months ago 51

Selena Maranjian, The Motley Fool

Fri, July 24, 2026 astatine 9:20 AM CDT 4 min read

Should you put successful maturation exchange-traded funds (ETFs) oregon dividend-focused ETFs? It's a large question, and determination are immoderate coagulated reasons to take either one.

You'll spot a twelve fashionable ETFs, including immoderate of each kind, below. I've ranked them by dividend yield. Note however dividend yields and performances are astir inversely related. The higher-yielding ETFs mostly person grown much slowly, portion the fastest-growing ETFs connection small successful yield.

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Two sacks, labeled hazard and reward, are balanced connected other ends of a seesaw.

Data source: Morningstar.com, arsenic of July 20, 2026.

Why put successful dividend-focused ETFs?

Obviously, the champion crushed to put successful dividend-focused ETFs is for the income. And you don't adjacent person to springiness up connected maturation with dividend payers. Yes, immoderate ETFs similar the preferred-stock 1 supra volition not turn much, but they'll present sizeable income.

But immoderate of these dividend ETFs amusement that you tin get respectable income and respectable maturation astatine the aforesaid time. The Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) and its planetary counterpart, the Schwab International Dividend Equity ETF (NYSEMKT: SCHY), are good examples, arsenic is the Fidelity High Dividend ETF (NYSEMKT: FDVV).

Another crushed to see dividend ETFs is if you're disquieted astir a looming banal marketplace crash. When the marketplace crashes, it's often overvalued maturation stocks that autumn hardest. Companies that person committed to paying dividends thin not to turn arsenic briskly and are little volatile, with sufficiently dependable income to enactment a regular payout.

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