In today’s volatile market, many investors are turning to dividend ETFs as a reliable source of income and long-term capital appreciation. Whether you're nearing retirement or simply looking to build wealth over time, dividend-paying ETFs offer a combination of stability, yield, and growth. Here are five of the best dividend ETFs to buy and hold forever, ideal for conservative investors focused on passive income and portfolio durability.
1. Vanguard S&P 500 ETF (VOO): Core Market Exposure at Low Cost
The Vanguard S&P 500 ETF (VOO) is a staple for many long-term investors. By tracking the performance of the S&P 500 Index, VOO provides exposure to 500 of the largest U.S. companies across multiple sectors.
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Dividend Yield: ~1.1%
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Expense Ratio: 0.03%
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Assets Under Management (AUM): $568 billion+
VOO has historically delivered strong returns, rising over 300% since 2011 (excluding dividends). Its ultra-low fees and diversified holdings make it a solid foundation for any investment portfolio.
2. Utilities Select Sector SPDR Fund (XLU): Stable Income from Defensive Stocks
The Utilities Select Sector SPDR Fund (XLU) offers targeted exposure to the utilities sector, which is known for its stability and consistent dividend payouts. With rising energy demand driven by AI technologies and data centers, this ETF is seeing renewed investor interest.
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Dividend Yield: 2.56%
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Expense Ratio: 0.09%
Year-to-date, XLU has returned over 27%, proving its relevance even during economic uncertainty. It's a great option for conservative investors seeking defensive sector exposure with reliable income.
3. SPDR S&P Dividend ETF (SDY): A Legacy of Dividend Growth
Focused on companies with a history of increasing dividends for at least 20 consecutive years, the SPDR S&P Dividend ETF (SDY) is a top pick for dividend growth investors.
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Dividend Yield: 2.29%
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Expense Ratio: 0.35%
SDY has gained nearly 12% year-to-date, showcasing the strength of its underlying dividend aristocrats. It’s a go-to option for those who value consistency and proven income growth.
4. JPMorgan Equity Premium Income ETF (JEPI): High Yield with Lower Volatility
The JPMorgan Equity Premium Income ETF (JEPI) is unique for its covered call strategy, which allows it to deliver high monthly income while managing volatility.
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Dividend Yield: 10.7%
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Expense Ratio: 0.35%
JEPI has posted an 8% return this year, and when dividends are included, that number rises to the high teens. Ideal for income-focused investors, JEPI offers an attractive yield with a defensive tilt.
5. Schwab U.S. Dividend Equity ETF (SCHD): Growth Meets Income
The Schwab U.S. Dividend Equity ETF (SCHD) targets high-quality U.S. companies with at least 10 years of consistent dividend payments. With a low-cost structure and strong track record, SCHD is a favorite among long-term investors.
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Dividend Yield: ~3.3%
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Expense Ratio: 0.06%
Since its inception in 2011, SCHD has averaged an annual return of 13.4%, outperforming the S&P 500 over the same period. It's an excellent pick for those who want both reliable income and robust growth.
Final Thoughts: Building a Future with Dividend ETFs
These five dividend ETFs—VOO, XLU, SDY, JEPI, and SCHD—offer a compelling blend of income, growth, and stability. Whether you want broad market exposure, sector-specific returns, or enhanced yields through smart strategies, these ETFs are designed for investors who prefer to buy, hold, and enjoy the benefits of compounding returns.
By including one or more of these in your portfolio, you can build a reliable income stream and stay on track toward your long-term financial goals.