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Yahoo
02-07-2025
- Business
- Yahoo
FNDX Is a Popular Dividend ETF for Passive Income. But Is It the Best?
FNDX mirrors the RAFI Fundamental High Liquidity U.S. Large Index, which is actively managed. While this more active approach leads to a little more yearly tax liability, it's worth it in the long run. FNDX is appropriate for income-minded investors who also want capital growth from value stocks. 10 stocks we like better than Schwab Strategic Trust - Schwab Fundamental U.s. Large ETF › There are some great dividend-generating exchange-traded funds (ETFs) out there, but investors understandably want the best. Even the smallest of advantages can make a big difference to their portfolio's bottom line as the years add up. Of course, whatever ETF is chosen must also meet their bigger-picture non-income goals. So, how does the Schwab Fundamental U.S. Large ETF (NYSEMKT: FNDX) stack up among all the major income-generating exchange-traded funds? While it's not the market's most-owned dividend ETF, it has attracted a respectably sized crowd for all the right reasons. Indeed, for a certain set of income-minded investors, this fund may well be your very best choice. It's not the go-to name in the category. That honor belongs to the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) and the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD), boasting $91 billion and $68 billion in investor assets, respectively. Schwab's Fundamental U.S. Large ETF is markedly smaller, with only $18 billion worth of assets under management. Size isn't necessarily a sign of superiority, though. The Schwab Fundamental U.S. Large ETF is just distinctly different from either of those other two ETFs, meant for a different group of investors. Namely, FNDX isn't as much of a dividend fund as it is a performance-oriented value fund that also makes regular -- and rising -- dividend payments. The ETF mirrors the RAFI Fundamental High Liquidity U.S. Large Index, which is not on most investors' radars. But it's an interesting premise all the same. Rather than a cap-weighted index like the S&P 500 that's allowed to ebb and flow unchecked until some of those tickers are replaced by more appropriate ones at some point in the future, the RAFI Fundamental High Liquidity U.S. Large Index weights the size of its holdings based on fundamental criteria like equity vs. assets, operating cash flow, and dividends combined with stock buybacks. The more fundamentally compelling the stock is, the more of it the index owns. And this portfolio is rebalanced on a quarterly rather than an annual basis. This quick cadence of portfolio rebalancing isn't a drawback (due to greater taxability). It's not even just an attribute. It's a feature. This strategy of regularly -- and proactively -- swapping out overvalued value names with more undervalued ones "eliminates the performance drag associated with traditional passive investment vehicles," according to the fund. The end result? This approach "has historically led to outperformance in developed markets of approximately 1.5%–2% a year." And FNDX's long-term net gains confirm that the strategy is indeed working for this ETF. For the past 10 years, it's outperformed the comparable Vanguard Value ETF (NYSEMKT: VTV) as well as the Schwab U.S. Large-Cap Value ETF (NYSEMKT: SCHV), the latter of which is built to reflect the performance of the Dow Jones U.S. Large-Cap Value Total Stock Market Index. In other words, this slightly more active and automated replacement strategy seems to work at least a little better than a pure buy-and-hold minimalist regimen. Obviously, net gains are great, particularly if they're achieved at a modest degree of risk. That's not the chief goal here, however. Income investors' first priority is dividends. Where does the Schwab Fundamental U.S. Large ETF land on that front? It's a healthy option for some. It's not as immediately compelling as the aforementioned Schwab U.S. Dividend Equity ETF, which currently sports a yield of just under 4%. The ProShares S&P 500 Dividend Aristocrats ETF is presently paying more as well, with newcomers plugging in at a dividend yield of nearly 2.5%. (The term Dividend Aristocrats® is a registered trademark of Standard & Poor's Financial Services LLC.) For perspective, FNDX's current trailing yield is a mere 1.8%. That's a dividend yield, however, based on payments that have been reliably raised since that fund's inception back in 2013. In fact, its quarterly per-share payout has more than doubled over the course of the past 10 years. So, while it offers a smaller starting yield, this ETF's dividend payment grows just as quickly as those of more dividend-minded exchange-traded funds. To this end, between the reinvestment of capital gains and dividends dished out in the meantime, on a net basis, FNDX has actually outperformed NOBL and SCHD since the middle of 2015 by virtue of its greater capital appreciation -- even if it hasn't led for the entirety of that 10-year stretch. If you're looking for the highest-possible entry yield with an investment that will also reliably grow its dividends over time, your best option is still the ProShares S&P 500 Dividend Aristocrats ETF or the Schwab U.S. Dividend Equity ETF, both of which boast better yields than FNDX's current dividend yield of less than 2%. Just understand the sacrifice you'll likely be making. That's weaker net gains due to weaker capital appreciation. On the other hand, if you're looking for an equal combination of dividends, dividend growth, and a simple way of adding value holdings to your portfolio at a time when growth stocks may be losing some of their luster, the Schwab Fundamental U.S. Large ETF makes good sense despite its more modest yield. What about the portfolio's above-average turnover (of more than 10%) that leads to greater annual taxability? That's certainly something to consider if this position is going to be owned outside of an IRA. Even then, however, don't undermine your long-term net performance by postponing or avoiding taxes just for the sake of postponing or avoiding taxes. You'll owe taxes one way or another. Remember as well that while FNDX can create an annual tax bill, you're also effectively raising the cost basis on your holding every year. This can also make it more palatable to sell the position in the future, should you decide to do so. Before you buy stock in Schwab Strategic Trust - Schwab Fundamental U.s. Large ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Schwab Strategic Trust - Schwab Fundamental U.s. Large ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $697,627!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $939,655!* Now, it's worth noting Stock Advisor's total average return is 1,045% — a market-crushing outperformance compared to 178% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 30, 2025 James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ProShares S&P 500 Dividend Aristocrats ETF, Vanguard Dividend Appreciation ETF, and Vanguard Index Funds-Vanguard Value ETF. The Motley Fool has a disclosure policy. FNDX Is a Popular Dividend ETF for Passive Income. But Is It the Best? was originally published by The Motley Fool
Yahoo
02-07-2025
- Business
- Yahoo
SCHD Is a Popular Dividend ETF for Passive Income. But Is It the Best?
The Schwab U.S. Dividend Equity ETF focuses on companies that pay high dividend yields and have a track record of consistency. Its average dividend yield over the past five years is over twice as high as the S&P 500's. The ETF is less diversified than other broad market ETFs, so it may be best used as a supplemental holding. 10 stocks we like better than Schwab U.S. Dividend Equity ETF › There's no shortage of exchange-traded funds (ETFs) on the stock market today, covering everything from specific indexes and industries to geographic regions and investment strategies. Regarding the latter, there has been a jump in popularity of dividend-focused ETFs, including the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD). For those looking for consistent dividend income, is the SCHD the best ETF on the market? For many investors, the answer could be yes. Of course, there's no "perfect" stock or ETF, but SCHD has shown it has the tools needed to be a great addition to the portfolio of anyone who wants a mix of stability and above-average dividend payouts. SCHD tracks the Dow Jones U.S. Dividend 100 Index, which focuses on high dividend-yield stocks with a track record of consistent, growing payouts and strong business fundamentals. Those criteria mean that most of the stocks held in SCHD tend to be large companies with impressive cash flows. Here are the SCHD's top 10 holdings and what percentage of the fund they represent: Company Percentage of the ETF Texas Instruments 4.27% Cisco Systems 4.22% ConocoPhillips 4.17% Chevron 4.15% Merck & Co. 3.97% AbbVie 3.93% Altria Group 3.91% Home Depot 3.85% Verizon Communications 3.84% Coca-Cola 3.84% Source: Charles Schwab. Percentages as of June 27. SCHD is slightly top-heavy, with the top 10 holdings accounting for 40% of the fund, but they're relatively evenly distributed among themselves. Compare this to the S&P 500 index, where Nvidia, Microsoft, and Apple alone can easily make up over 20% of the index, or the Nasdaq-100, where they can make up a quarter. Being led by what many may see as "boring" companies also helps keep SCHD relatively stable during down periods. SCHD's current dividend yield (as of June 27) is around 3.9%, slightly above its average for the past five years. Both its current dividend yield and five-year average yield are more than twice that of the S&P 500. SCHD's low 0.06% expense ratio also ensures that you keep more of the ETF's total returns for yourself, rather than paying them in fees. That's only $0.60 in fees per $1,000 invested in the fund, which is lower than many comparable ETFs. SCHD is a great option for investors looking for passive income. It offers a powerful trifecta: a high dividend yield, a portfolio of high-quality companies, and a low expense ratio. You can't ask for much more. That said, SCHD is probably best suited as a supplemental piece in most investors' portfolios, rather than as the foundation. The income component is valuable, but the underlying index's criteria for inclusion mean lots of great companies are left out. SCHD is also less diversified than broad market funds like the Vanguard S&P 500 ETF or Vanguard Total Stock Market ETF. For income investors, though, SCHD is one of the best ETF options on the market. Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Schwab U.S. Dividend Equity ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $722,181!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $968,402!* Now, it's worth noting Stock Advisor's total average return is 1,069% — a market-crushing outperformance compared to 177% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 30, 2025 Stefon Walters has positions in Apple, Coca-Cola, Microsoft, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends AbbVie, Apple, Chevron, Cisco Systems, Home Depot, Merck, Microsoft, Nvidia, Texas Instruments, Vanguard S&P 500 ETF, and Vanguard Total Stock Market ETF. The Motley Fool recommends Verizon Communications and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. SCHD Is a Popular Dividend ETF for Passive Income. But Is It the Best? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
01-07-2025
- Business
- Globe and Mail
HDV Is a Popular Dividend ETF for Passive Income. But Is It the Best?
Artificial intelligence (AI), big tech, and cryptocurrencies all have their fans among investors, and with good reason. All can add to a well-balanced portfolio that will help make you richer over time. But you shouldn't forget about income investing -- buying stocks that reward you for holding them by paying a nice, sizable dividend on a regular basis. Rather than trying to pick one or two (or 12) dividend stocks, many investors turn to exchange-traded funds (ETFs) to do the heavy lifting. Dividend ETFs are popular go-to options for investors who are seeking a passive income flow. One of the most popular is the iShares Core High Dividend ETF (NYSEMKT: HDV), a fund that has more than $11 billion in assets and trades roughly 400,000 shares per day. About the HDV ETF HDV tracks the Morningstar Dividend Yield Focus Index, which screens for companies with strong balance sheets and a wide economic moat -- exactly what a passive income investor is looking for. It holds 76 stocks, with top holdings including ExxonMobil, Johnson & Johnson, AbbVie, Chevron, AT&T, and Coca-Cola. Those are important names to know, because fully 50% of the fund is weighed in its top 10 holdings -- that means the fund can be a little overweight toward top names, but those companies are also some of the best dividend stocks you can buy. HDV offers a dividend yield of 3.7% and has a minuscule expense ratio of 0.08, or $8 annually for each $10,000 invested. But HDV isn't your only option. There are several quality ETFs in the market that offer investors the opportunity to bring in regular income and provide instant diversification. Let's take a look at some of the alternatives: Statistic HDV SCHD VYM SPYD Price-to-earnings ratio 16.2 13.6 16.1 14.3 Price-to-sales ratio 2.3 1.4 1.7 1.3 Number of equity holdings 76 99 585 77 Dividend yield 3.7% 3.9% 2.9% 4.5% Expense ratio 0.08 0.06 0.06 0.07 Data sources: Morningstar, author research. Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD): This fund focuses on stable dividend-paying stocks by tracking the Dow Jones U.S. Dividend 100 Index. With 99 equities in its portfolio, SCHD has a lot of blue chip names, including Chevron, ConocoPhillips, Merck, Texas Instruments, and Cisco Systems. SCHD pays a dividend yield of 3.9%, and its expense ratio is a bit lower than HDV at 0.06. Vanguard High Dividend Yield Index Fund ETF Shares (NYSEMKT: VYM): Vanguard index funds are always popular picks, and they typically do a great job. VYM tracks the FTSE High Dividend Yield Index and is the most diversified on this list, holding 585 stocks. Top names include Broadcom, JPMorgan Chase, ExxonMobil, Walmart, and Procter & Gamble. While the expense ratio is slightly lower than HDV at 0.06, VYM also provides a lower yield at 2.9%. SPDR Portfolio S&P 500 High Dividend ETF (NYSEMKT: SPYD): This ETF tracks the S&P 500 High Dividend Index, which is an equal-weighted index of the 80 highest-yielding stocks in the S&P 500. Top names here include Philip Morris International, Hasbro, AT&T, CVS Health, and Crown Castle. SPYD has the best yield of the ETFs that we're considering, coming in at 4.5%, and the expense ratio is 0.07. Picking a winner Honestly, there's no cut-and-dried answer here. SCHD has great blue chip names; VYM provides the best diversification; and SPYD has the advantage of an outstanding dividend yield. VYM Year to Date Total Returns (Daily) data by YCharts If I have to make a choice for a high-yield ETF, I'm going with the HDV ETF by a nose, for two simple reasons. First, it's outperformed the other ETFs on this list year to date, providing nearly a 5% gain. And second, the HDV provides the best dividend on a dollar-and-cents basis, paying out $0.91 during the past year. That's an important distinction when you think about holding on to a passive income ETF for a long time. To reiterate, this is a strong group of dividend ETFs. The best choice usually rests with the individual investor. But for me, HDV is the call. Should you invest $1,000 in iShares Trust - iShares Core High Dividend ETF right now? Before you buy stock in iShares Trust - iShares Core High Dividend ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and iShares Trust - iShares Core High Dividend ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $966,931!* Now, it's worth noting Stock Advisor 's total average return is1,062% — a market-crushing outperformance compared to177%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 30, 2025 JPMorgan Chase is an advertising partner of Motley Fool Money. Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Chevron, Cisco Systems, Crown Castle, JPMorgan Chase, Merck, Texas Instruments, Vanguard Whitehall Funds - Vanguard High Dividend Yield ETF, and Walmart. The Motley Fool recommends Broadcom, CVS Health, Hasbro, Johnson & Johnson, and Philip Morris International. The Motley Fool has a disclosure policy.
Globe and Mail
30-06-2025
- Business
- Globe and Mail
CGDV Is a Popular Dividend ETF for Passive Income. But Is It the Best?
The Capital Group Dividend Value ETF (NYSEMKT: CGDV) is one of the largest exchange-traded funds focused on dividend-paying stocks. The fund has nearly $17.7 billion in assets under management (AUM), ranking as the eighth largest fund dedicated to dividend investment. Its focus on dividends makes it a popular option for those seeking passive income. While CGDV is one of the largest and most popular dividend ETFs, that doesn't necessarily mean it's the best for passive income. Here's a closer look at the fund and how it compares with other top dividend ETFs. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » A closer look at the Capital Group Dividend Value ETF The Capital Group Dividend Value ETF is an actively managed fund that seeks to invest in companies that produce above-average dividend income and can grow in value. It primarily invests in larger U.S. companies that pay dividends. However, the fund will invest up to 10% of its assets in larger companies outside the U.S. and some stocks that don't currently pay dividends but have the potential to pay them. CGDV currently has about 50 holdings, 90% of them U.S.-based, with 7% based outside the United States, and the remaining 3% consisting of cash. It has a reasonably diversified portfolio of dividend stocks by sector, led by technology stocks at 22%. Here's a snapshot of its top five holdings: Microsoft, 6.4% of the fund's holdings: While the technology giant has a rather low dividend yield at less than 1%, it was the largest dividend payer in the world last year, at nearly $23 billion. It has also increased its payment for 20 straight years, including by more than 10% last year. Broadcom, 5.6%: The semiconductor and software company has a dividend yield below 1%. It has increased its dividend for 14 straight years, including by 11% last year. RTX, 4.7%: The aerospace and defense contractor has a nearly 2% dividend yield. It has paid cash dividends every year since 1936 and raised its payment by 7.9% this year. British American Tobacco, 4.1%: The tobacco company has a dividend yield exceeding 6%. It has grown its dividend at a 5% compound annual rate over the past decade. GE Aerospace, 4.1%: The aerospace company has a roughly 0.5% dividend yield. It increased its dividend nearly 30% earlier this year. As those top holdings show, the fund holds a mix of higher-yielding dividend stocks and lower-yielding but faster-growing dividend payers. Over the past 12 months, CGDV has paid dividends equating to a 1.5% yield. That's above the S&P 500 's average of less than 1.5%. Is CGDV the best dividend ETF for passive income? The Capital Group Dividend Value ETF provides investors with an above-average dividend yield compared with the S&P 500, making it a better option than the broader market index for those seeking passive income. However, several other ETFs have higher dividend yields. For example, the iShares Core High Dividend ETF (NYSEMKT: HDV) has a 3.5% dividend yield based on its payments over the trailing 12 months. Meanwhile, the SPDR Portfolio S&P 500 High Dividend ETF (NYSEMKT: SPYD) has a dividend yield of around 4.5%. iShares Core High Dividend ETF is a passively managed fund that tracks the performance of the Morningstar Dividend Yield Focus Index. That index screens for companies with attractive dividend yields and strong financial qualities. The fund holds 75 companies. Its top holdings all have well-above-average dividend yields, and most companies have solid records of increasing their dividend payments. SPDR Portfolio S&P High Dividend ETF is also a passively managed fund. It aims to track the S&P 500 High Dividend Index, which measures the performance of the top 80 high-dividend-yielding companies in the S&P 500. In addition to their higher yields, these funds also have lower costs. The actively managed Capital Group Dividend Value ETF has a 0.33% ETF expense ratio. That compares with 0.08% for the iShares Core High Dividend ETF and 0.07% for the SPDR Portfolio S&P High Dividend ETF. Put another way, every $10,000 invested in CGDV would cost $33 annually, compared with $8 for HDV and $7 for SPYD. CGDV's higher costs eat into the dividend income it would have paid to investors. A good dividend ETF, but not the best for passive income The Capital Group Dividend Value ETF is a solid fund for those seeking to invest in companies with above-average dividend yields and solid growth profiles. Those features could enable the fund to produce attractive total returns over the long term. However, it's not the best dividend ETF if your goal is generating passive income. It has a much lower yield and higher expense ratio than other top dividend ETFs, such as the iShares Core High Dividend ETF and the SPDR Portfolio S&P High Dividend Those ETFs are better options for those currently seeking to generate more passive income. Should you invest $1,000 in Capital Group Dividend Value ETF right now? Before you buy stock in Capital Group Dividend Value ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Capital Group Dividend Value ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $966,931!* Now, it's worth noting Stock Advisor 's total average return is1,062% — a market-crushing outperformance compared to177%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 30, 2025 Matt DiLallo has positions in Broadcom. The Motley Fool has positions in and recommends Microsoft. The Motley Fool recommends British American Tobacco, Broadcom, GE Aerospace, and RTX and recommends the following options: long January 2026 $395 calls on Microsoft, long January 2026 $40 calls on British American Tobacco, short January 2026 $40 puts on British American Tobacco, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Yahoo
30-06-2025
- Business
- Yahoo
CGDV Is a Popular Dividend ETF for Passive Income. But Is It the Best?
The Capital Group Dividend Value ETF is the eighth-largest dividend-focused ETF. It invests in companies that pay above-average dividends and have solid growth profiles. It has a lower yield and higher ETF expense ratio than some other top dividend ETFs. 10 stocks we like better than Capital Group Dividend Value ETF › The Capital Group Dividend Value ETF (NYSEMKT: CGDV) is one of the largest exchange-traded funds focused on dividend-paying stocks. The fund has nearly $17.7 billion in assets under management (AUM), ranking as the eighth largest fund dedicated to dividend investment. Its focus on dividends makes it a popular option for those seeking passive income. While CGDV is one of the largest and most popular dividend ETFs, that doesn't necessarily mean it's the best for passive income. Here's a closer look at the fund and how it compares with other top dividend ETFs. The Capital Group Dividend Value ETF is an actively managed fund that seeks to invest in companies that produce above-average dividend income and can grow in value. It primarily invests in larger U.S. companies that pay dividends. However, the fund will invest up to 10% of its assets in larger companies outside the U.S. and some stocks that don't currently pay dividends but have the potential to pay them. CGDV currently has about 50 holdings, 90% of them U.S.-based, with 7% based outside the United States, and the remaining 3% consisting of cash. It has a reasonably diversified portfolio of dividend stocks by sector, led by technology stocks at 22%. Here's a snapshot of its top five holdings: Microsoft, 6.4% of the fund's holdings: While the technology giant has a rather low dividend yield at less than 1%, it was the largest dividend payer in the world last year, at nearly $23 billion. It has also increased its payment for 20 straight years, including by more than 10% last year. Broadcom, 5.6%: The semiconductor and software company has a dividend yield below 1%. It has increased its dividend for 14 straight years, including by 11% last year. RTX, 4.7%: The aerospace and defense contractor has a nearly 2% dividend yield. It has paid cash dividends every year since 1936 and raised its payment by 7.9% this year. British American Tobacco, 4.1%: The tobacco company has a dividend yield exceeding 6%. It has grown its dividend at a 5% compound annual rate over the past decade. GE Aerospace, 4.1%: The aerospace company has a roughly 0.5% dividend yield. It increased its dividend nearly 30% earlier this year. As those top holdings show, the fund holds a mix of higher-yielding dividend stocks and lower-yielding but faster-growing dividend payers. Over the past 12 months, CGDV has paid dividends equating to a 1.5% yield. That's above the S&P 500's average of less than 1.5%. The Capital Group Dividend Value ETF provides investors with an above-average dividend yield compared with the S&P 500, making it a better option than the broader market index for those seeking passive income. However, several other ETFs have higher dividend yields. For example, the iShares Core High Dividend ETF (NYSEMKT: HDV) has a 3.5% dividend yield based on its payments over the trailing 12 months. Meanwhile, the SPDR Portfolio S&P 500 High Dividend ETF (NYSEMKT: SPYD) has a dividend yield of around 4.5%. iShares Core High Dividend ETF is a passively managed fund that tracks the performance of the Morningstar Dividend Yield Focus Index. That index screens for companies with attractive dividend yields and strong financial qualities. The fund holds 75 companies. Its top holdings all have well-above-average dividend yields, and most companies have solid records of increasing their dividend payments. SPDR Portfolio S&P High Dividend ETF is also a passively managed fund. It aims to track the S&P 500 High Dividend Index, which measures the performance of the top 80 high-dividend-yielding companies in the S&P 500. In addition to their higher yields, these funds also have lower costs. The actively managed Capital Group Dividend Value ETF has a 0.33% ETF expense ratio. That compares with 0.08% for the iShares Core High Dividend ETF and 0.07% for the SPDR Portfolio S&P High Dividend ETF. Put another way, every $10,000 invested in CGDV would cost $33 annually, compared with $8 for HDV and $7 for SPYD. CGDV's higher costs eat into the dividend income it would have paid to investors. The Capital Group Dividend Value ETF is a solid fund for those seeking to invest in companies with above-average dividend yields and solid growth profiles. Those features could enable the fund to produce attractive total returns over the long term. However, it's not the best dividend ETF if your goal is generating passive income. It has a much lower yield and higher expense ratio than other top dividend ETFs, such as the iShares Core High Dividend ETF and the SPDR Portfolio S&P High Dividend Those ETFs are better options for those currently seeking to generate more passive income. Before you buy stock in Capital Group Dividend Value ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Capital Group Dividend Value ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $966,931!* Now, it's worth noting Stock Advisor's total average return is 1,062% — a market-crushing outperformance compared to 177% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 30, 2025 Matt DiLallo has positions in Broadcom. The Motley Fool has positions in and recommends Microsoft. The Motley Fool recommends British American Tobacco, Broadcom, GE Aerospace, and RTX and recommends the following options: long January 2026 $395 calls on Microsoft, long January 2026 $40 calls on British American Tobacco, short January 2026 $40 puts on British American Tobacco, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. CGDV Is a Popular Dividend ETF for Passive Income. But Is It the Best? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
