8 Top Index Funds For Dividends - The Motley Fool

Accessibility MenuSearch for a companyAccessibility...HelpArrow-Thin-DownS&P 5006,939.03-0.4%-29.98Arrow-Thin-DownDJI48,892.47-0.4%-179.09Arrow-Thin-DownNASDAQ23,461.82-0.9%-223.30Arrow-Thin-DownBitcoin$75,050.00-4.6%-$3,598.94Arrow-Thin-DownTCGL$172.84+100.1%+$86.48Arrow-Thin-DownSNDK$576.25+6.9%+$36.95Arrow-Thin-DownVZ$44.51+11.8%+$4.70Arrow-Thin-DownDECK$119.34+19.5%+$19.44Arrow-Thin-DownRKT$17.93-13.7%-$2.84Arrow-Thin-DownU$29.03-24.4%-$9.37Arrow-Thin-DownAMZN$239.26-1.0%-$2.47Arrow-Thin-DownGOOG$338.53-0.0%-$0.13Arrow-Thin-DownMETA$716.47-3.0%-$21.84Arrow-Thin-DownMSFT$429.91-0.8%-$3.59Arrow-Thin-DownNVDA$191.13-0.7%-$1.38Arrow-Thin-DownTSLA$430.62+3.4%+$14.06Daily Stock GainersDaily Stock LosersMost Active Stocksarrow-leftarrow-rightDaily Stock GainersDaily Stock LosersMost Active Stocks

1. Home>
2. Investing>
3. How To Invest>
4. Index Funds>
5. Dividends

Top 8 Index Funds for Dividends in 2026

Consider dividend index funds that pay a solid dividend and offer a high probability of price appreciation.

By Tony Dong – Updated Oct 9, 2025 at 3:02 PM EST | Fact-checked by Frank BassShareFollow

Key Points

• Dividend index funds are suited for those seeking steady income from investments without stock-picking.
• Top funds like Invesco S&P 500 High Dividend Low Volatility ETF offer monthly dividends.
• Consider the fund's dividend yield, expense ratio, and risk level to match your investment goals.

• Top dividend index funds
• What to look for
• Long-term investments
• Why invest?
• FAQ

What are dividend index funds? Let's take each word in reverse order to paint a complete picture.

First, they're funds -- either mutual funds or exchange-traded funds (ETFs). Second, they attempt to track an index comprising multiple stocks. Third, they focus on stocks that pay dividends.

Just as dividend stocks aren't ideally suited for every investor, dividend index funds won't appeal to everyone.

However, if you're primarily interested in obtaining a steady income rather than high growth from your investments, these funds could be just what you're looking for -- and there's no stock-picking required.

Eight top dividend index funds to buy

Here are eight dividend index funds (in no particular order) that have relatively low expense ratios but varying dividend yields and risk levels.

Data source: Yahoo! Finance, Morningstar, Various fund providers. Data current as of October 2025

Fund	Dividend Yield	Expense Ratio	Risk Level
Invesco S&P 500 High Dividend Low Volatility ETF (NYSEMKT:SPHD)	4.60%	0.30%	Below average
iShares Core High Dividend ETF (NYSEMKT:HDV)	3.31%	0.08%	Average
ProShares S&P 500 Dividend Aristocrats ETF (NYSEMKT:NOBL)	2.09%	0.35%	Average
Schwab U.S. Dividend Equity ETF (NYSEMKT:SCHD)	3.83%	0.06%	Average
Vanguard High Dividend Yield ETF (NYSEMKT:VYM)	2.45%	0.06%	Average
Vanguard Dividend Appreciation ETF (NYSEMKT:VIG)	1.59%	0.05%	Average
iShares Core Dividend Growth ETF (NYSEMKT:DGRO)	2.19%	0.08%	Average
WisdomTree U.S. Quality Dividend Growth Fund (NASDAQ:DGRW)	1.44%	0.28%	Average

1. Invesco S&P 500 High Dividend Low Volatility ETF

Expand

NYSEMKT: SPHD

Invesco Exchange-Traded Fund Trust II - Invesco S&P 500 High Dividend Low Volatility ETFToday's Change(1.43%) $0.71Current Price$50.28

Key Data Points

Day's Range$49.60 - $50.3052wk Range$43.39 - $51.60Volume1.2MLoading paragraph...

2. iShares Core High Dividend ETF

Expand

NYSEMKT: HDV

iShares Trust - iShares Core High Dividend ETFToday's Change(1.16%) $1.51Current Price$132.19

Key Data Points

Day's Range$130.27 - $132.3152wk Range$106.00 - $132.31Volume618K

This ETF is benchmarked to the Morningstar Dividend Yield Focus Index (HDV +1.16%). It holds 75 U.S. high-yielding dividend stocks with overweights in the energy, consumer staples, and healthcare sectors.

Definition Icon

Exchange-Traded Fund (ETF)

An exchange-traded fund, or ETF, allows investors to buy many stocks or bonds at once.

3. ProShares S&P 500 Dividend Aristocrats ETF

Expand

NYSEMKT: NOBL

ProShares S&P 500 Dividend Aristocrats ETFToday's Change(0.65%) $0.71Current Price$109.97

Key Data Points

Day's Range$108.75 - $110.0052wk Range$89.76 - $110.11Volume717K

The ProShares S&P 500 Dividend Aristocrats ETF (NOBL +0.65%) tracks the performance of Dividend Aristocrats® -- S&P 500 members that have increased their dividends for at least 25 consecutive years. (The term Dividend Aristocrats® is a registered trademark of Standard & Poor's Financial Services LLC.) The focus here is not on high yields but rather on companies that have consistently increased their dividends. The index is equal-weighted.

4. Schwab U.S. Dividend Equity ETF

Expand

NYSEMKT: SCHD

Schwab U.S. Dividend Equity ETFToday's Change(1.53%) $0.45Current Price$29.82

Key Data Points

Day's Range$29.38 - $29.8252wk Range$23.87 - $29.82Volume23M

The Schwab U.S. Dividend Equity ETF (SCHD +1.53%) seeks to track the total return of the Dow Jones U.S. Dividend 100 index. This index uses a composite score that screens for a minimum of 10 years of dividend payments, along with a composite metric that assesses free cash flow to total debt, return on equity, dividend yield, and a five-year dividend growth rate.

5. Vanguard High Dividend Yield ETF

Expand

NYSEMKT: VYM

Vanguard Whitehall Funds - Vanguard High Dividend Yield ETFToday's Change(0.32%) $0.48Current Price$149.96

Key Data Points

Day's Range$148.41 - $150.1052wk Range$112.05 - $150.50Volume1.8M

The Vanguard High Dividend Yield ETF (VYM +0.32%) tracks the performance of the FTSE High Dividend Yield Index, which selects a market cap-weighted portfolio including 55% of the highest-yielding stocks on a forward-looking basis from a broader universe of U.S. equities. However, it excludes real estate investment trusts (REITs).

6. Vanguard Dividend Appreciation ETF

Expand

NYSEMKT: VIG

Vanguard Dividend Appreciation ETFToday's Change(-0.13%) $-0.29Current Price$224.02

Key Data Points

Day's Range$222.29 - $224.2852wk Range$169.32 - $225.97Volume2.4M

The opposite of the Vanguard High Dividend Yield ETF, the Vanguard Dividend Appreciation ETF (VIG -0.13%) tracks the S&P U.S. Dividend Growers Index. It screens potential holdings for at least 10 consecutive years of dividend growth in addition to omitting the top 25% of the highest-yielding stocks to ensure quality, along with the usual exclusion of REITs.

7. iShares Core Dividend Growth ETF

Expand

NYSEMKT: DGRO

iShares Trust - iShares Core Dividend Growth ETFToday's Change(0.24%) $0.17Current Price$71.83

Key Data Points

Day's Range$71.14 - $71.9052wk Range$54.09 - $72.02Volume2.5M

The iShares Core Dividend Growth ETF (DGRO +0.24%) also targets dividend growth stocks via the Morningstar US Dividend Growth Index. By doing so, the iShares Core Dividend Growth ETF requires five consecutive years of dividend growth and a positive consensus earnings forecast and payout ratio of less than 75%. It also omits the top 10% of the highest-yielding stocks and REITs.

8. WisdomTree U.S. Quality Dividend Growth Fund

Expand

NASDAQ: DGRW

WisdomTree U.S. Quality Dividend Growth FundToday's Change(0.00%) $0.00Current Price$91.56

Key Data Points

Day's Range$90.81 - $91.6852wk Range$69.84 - $91.72Volume2.2M

The WisdomTree U.S. Quality Dividend Growth Fund (DGRW +0.00%) tracks the proprietary WisdomTree U.S. Quality Dividend Growth Index, which screens holdings based on three-year historical averages for return on equity (ROE) and return on assets (ROA), long-term earnings growth expectations, and weights the portfolio by dividend payout.

What to look for in dividend index funds

A good first step is to determine your overall asset allocation and, as a follow-up, the amount of money you have to invest in stocks and/or equity index funds.

Once you've done the pre-work, you can visit any of the major online discount brokerages, such as Vanguard, Fidelity, or Charles Schwab, all of which offer free (or very low-cost) ETF trading.

Here are three top considerations when selecting dividend index funds to buy:

• Dividend yield: Dividend payouts as a percentage of the fund's price.
• Expense ratio: The percentage of fund assets used for operating costs.
• Risk level: The riskiness of the fund based on historical volatility.

To some extent, there's a trade-off between dividend yield and risk level. Generally speaking, higher yields are associated with higher risk, but higher expense ratios don't necessarily translate to higher dividend yields or lower risk levels.

It's also important to remember that dividend yield alone does not act as a perfect indicator of future performance.

Focusing only on companies paying dividends leaves out many that derive their growth from price appreciation, such as those in big tech.

Make sure you construct a diversified portfolio that covers a wide population of underlying firms with different capital strategies.

Dividend index funds are long-term investments

The stock market can be volatile in the short term. So, it's important to keep in mind that dividend index funds are meant to be held for the long run.

First, the longer you hold your index funds, the better performance you're likely to see. Longer holding periods lend themselves to more compounding, which enables your money to grow rapidly in later years.

Second, short-term market movements tend to be unreliable when it comes to successful investing. As we've seen this year, short-term market swings can be erratic both in direction and magnitude.

However, longer-term investment horizons have reliably trended upward, especially when it comes to dividend-paying blue chip stocks.

Finally, longer holding periods also make your portfolio more tax-efficient. If you keep your dividend index funds for longer than a designated holding period, you'll be eligible for qualified dividends, which are taxed at a lower capital gains rate when earned.

If you do choose to allocate a portion of your portfolio to dividend index funds, know that short-term price movements are entirely normal. A long-term focus has historically been a preferable strategy.

Related investing topics

8 Best Index Funds to Buy in February 2026

Looking to the long term? Get in on these index funds.

Top 3 S&P 500 Index Funds to Buy in 2026

Multiple index funds track the S&P 500. Which ones are the best investments for you?

S&P 500 Index Fund Average Annual Return Rate

So what kind of returns can you expect if you buy an index fund? Depends on the fund.

9 Best Dividend Stocks to Buy and Hold for February 2026

These companies pay their shareholders regularly, making them good sources of income.

Why invest in dividend index funds?

Benefits:

• Provide a steady income for investors seeking regular cash flow.
• Offer diversification across many dividend-paying companies, reducing the risk of owning individual stocks.
• Help identify value-oriented companies through high-yield dividend strategies.
• Dividend growth funds focus on firms with strong balance sheets and consistent payout increases, signaling quality.
• Typically have low fees and offer an easy, passive way to gain exposure to income-generating stocks.

Risks:

• Dividend cuts can occur during market downturns or recessions.
• High-yield funds may include riskier or slower-growing companies.
• Interest rate changes can affect investor demand for dividend funds, affecting prices.
• Dividend index funds may underperform growth-oriented ETFs during bull markets led by high-growth sectors like tech.

FAQ

Dividend index funds FAQ

Are there dividend-paying index funds?

Do Vanguard index funds pay dividends?

Are dividend index funds risky?

Which dividend fund is best?

Does an S&P 500 index fund pay dividends?

Do ETF index funds pay dividends?

Do I pay taxes on dividends?

What is the best monthly dividend income ETF?

Tony Dong 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 Whitehall Funds - Vanguard High Dividend Yield ETF. The Motley Fool has a disclosure policy.

Stocks Mentioned

WisdomTree U.S. Quality Dividend Growth Fund

NASDAQ: DGRW$91.56 (+0.00%) $+0.00

ProShares S&P 500 Dividend Aristocrats ETF

NYSEMKT: NOBL$109.97 (+0.01%) $+0.71

Vanguard Dividend Appreciation ETF

NYSEMKT: VIG$224.02 (0.00%) $0.29

iShares Trust - iShares Core Dividend Growth ETF

NYSEMKT: DGRO$71.83 (+0.00%) $+0.17

Invesco Exchange-Traded Fund Trust II - Invesco S&P 500 High Dividend Low Volatility ETF

NYSEMKT: SPHD$50.28 (+0.01%) $+0.71

Vanguard Whitehall Funds - Vanguard High Dividend Yield ETF

NYSEMKT: VYM$149.96 (+0.00%) $+0.48

iShares Trust - iShares Core High Dividend ETF

NYSEMKT: HDV$132.19 (+0.01%) $+1.51

Schwab U.S. Dividend Equity ETF

NYSEMKT: SCHD$29.82 (+0.02%) $+0.45

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Our Guides

The 10 Best Low-Cost Index FundsTop 3 S&P 500 Index Funds to Buy in 2026Are Index Funds a Good Investment? Key Benefits to Know8 Best Index Funds to Buy in February 2026Best Small-Cap Index Funds for February 2026S&P 500 Index Fund Average Annual Return RateIndex Funds vs. Mutual Funds: What Are the Differences?Top 9 Safest Index Funds in 2026arrow-leftarrow-right

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.

View Premium Services

This ETF tracks the S&P 500 Low Volatility High Dividend Index (SPHD +1.43%). It isolates the highest-yielding stocks in the index and then selects the 50 with the lowest volatility. One thing to note with the Invesco S&P 500 High Dividend Low Volatility ETF is that it pays monthly dividends.