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Investing in dividend stocks is a portfolio allocation strategy that, frankly, hasn’t worked wonders for investors in recent years (or for the better part of two decades now). Growth stocks have reined supreme, and continue to drive the vast majority of the overall earnings and cash flow (and capital appreciation upside, for that matter) of large indices.
For investors who think that will remain the case for years to come, it’s okay to stop reading here. That’s because I’m going to be discussing three top exchange traded funds (ETFs) tracking dividend stocks I think can be bought for a song right now.
There are reasons why dividend stocks may begin to look much more attractive to investors in the coming years (or sooner). If interest rates come down materially, and balance sheet quality begins to matter more, these are companies that could be set up for significant outperformance even relative to their mega-cap tech counterparts.
Here are three top ETFs I think investors who find themselves with this perspective may want to consider right now.
iShares Select Dividend ETF (DVY)
Targeting high-yielding, established U.S.-based dividend players with sector biases toward utilities and financials, the iShares Select Dividend ETF (DVY) is an excellent option for investors looking for consistent dividend income and relatively high yields across the sectors this ETF is overweight.
With a 3.4% dividend yield, this ETF provides fixed income-like yield with a relatively attractive expense ratio of 0.38%. Now, that fee is higher than the other two options on this list. But I do think this fund’s approach toward allocating most of its capital toward more defensive sectors such as utilities, financials and industrials positions investors concerned about potential downside in the markets well.
With reliable cash flow and a pronounced value orientation, DVY’s focus on dividend sustainability is something I think investors concerned about risk ought to consider. Over long time horizons, DVY has delivered solid total returns compared to other index funds. That’s something that’s relatively hard to find, considering how meaningful top growth stocks have been to investor returns in recent years.
Whether this is a core holding, or viewed as a smaller satellite position within a portfolio, I think DVY is a top option to consider looking at right now.
WisdomTree U.S. LargeCap Dividend ETF (DLN)
For investors looking to benefit from continued growth seen among the highest market capitalization players in the market, the WisdomTree U.S. LargeCap Dividend ETF (DLN) is another excellent option to consider.
This fund invests in all the top mega-cap U.S. stocks investors watch closely (and many are already increasingly exposed to via other index funds). However, what this ETF does differently is weight each large-cap portfolio holding by cash dividends, creating a core U.S. dividend tilt relative to holding other ETFs tracking these names (or the broader market, for that matter, considering the importance of these companies to such index funds).
Holding around 300 stocks at a 0.28% expense ratio, I do think DLN’s dividend yield of 1.3% makes sense for investors. While that’s roughly two full percentage points lower than the above-mentioned pick, the reality is that investors who want more growth exposure within their portfolios (believing that the trend we’ve seen in recent years will continue to play out) may benefit from holding such a fund relative to other more pure-play dividend ETFs.
The long and short of it is, investors who think mega-cap growth will continue to outperform in 2026 may see the best performance from DLN relative to the other two picks on this list. It’s all about perspective, and I wanted to provide three picks that would meet most investors where they’re at in terms of their own unique profiles.
Schwab U.S. Dividend Equity ETF (SCHD)
One of my top holdings, and still a top pick of mine for investors looking for top-tier dividend ETFs, is the Schwab U.S. Dividend Equity ETF (SCHD).
What I like about SCHD is the fact that this ETF tracks the Dow Jones 100 Index, or the highest-quality U.S. companies in the market. These are firms with established business models, durable competitive advantages, and the size and scale to weather storms. Notably, these companies have provided strong growth in recent years, but many may also be viewed as relative defensive picks if we are heading into a period with more uncertainty in 2026.
The quality aspect of this ETF includes a number of quality and dividend-based factors used to screen stocks for their weighting in this ETF. With a current dividend yield of 3.7% and a rock-bottom expense ratio of just six basis points (0.06%), I think SCHD provides some of the best bang for one’s buck in this space. That’s why I continue to hold this particular ETF relative to the other picks on this list, and expect to do so for the long-term.