1 Dividend ETF to Buy Hand Over Fist and 1 to Avoid

It's 2026 and we're not conscionable talking astir tech stocks anymore!

The marketplace has broadened considerably and we're seeing antecedently unloved areas of the market, specified arsenic vigor and tiny caps, uncovering caller beingness again. More importantly for income seekers, dividend stocks person besides begun outperforming the S&P 500 (SNPINDEX: ^GSPC).

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That doesn't mean each dividend ETF looks charismatic close now. Strategies that absorption connected durable, prime stocks are astir apt built amended for this situation if we statesman seeing a slowdown. Funds that trust connected precocious yielders oregon those companies whose payouts are little reliable should inactive beryllium approached with caution.

For me, there's 1 peculiar ETF that fits each category.

The Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) is an aged favourite for galore investors. After applying a fewer liquidity screens, it targets U.S. companies that person accrued their yearly dividend for astatine slightest 10 consecutive years. Then it eliminates the apical 25% of yields to debar immoderate of the issues I mentioned earlier. That ends up producing a beardown halfway of dividend payers backed by beardown currency flows and steadfast equilibrium sheets that tin service arsenic a portfolio cornerstone.

With the labour marketplace cooling and geopolitical tensions rising, we've already seen investors positioning their portfolios much defensively. The creation of returns successful the aboriginal stages of 2026 suggests a authorities alteration from what's driven the marketplace implicit the past fewer years. This ETF is positioned to seizure that.

One happening to beryllium alert of with this fund: exertion is inactive its apical assemblage holding astatine 27%. I've discussed earlier astir however I don't truly similar the cap-weighting strategy of the fund. It ends up pulling the biggest companies to the apical careless of output oregon dividend history.

The existent apical 3 holdings -- Broadcom, Microsoft, and Apple -- are each tech stocks with yields of nether 1%. The remainder of the apical assemblage holdings, including financials (22%), healthcare (17%), industrials (11%), and user staples (10%), correspond a overmuch antithetic creation than that of the S&P 500 and amusement that the Vanguard Dividend Appreciation ETF tin beryllium an capable diversifier arsenic well.

The Global X SuperDividend ETF (NYSEMKT: SDIV) is simply a large illustration of wherefore investors shouldn't beryllium seduced by a precocious yield. It doesn't needfully marque it a atrocious investment, but those yields usually travel with much caveats and warnings than 1 mightiness beryllium alert of.