Definition
Dividend ETFs select stocks based on dividend characteristics: high yield, consistent growth, sustainability, or dividend aristocrat status. They provide regular income and historically lower volatility than the broad market. Strategies range from high-yield (maximizing current income) to dividend growth (companies with 10+ years of consecutive increases).
lightbulb Example
A dividend growth ETF holds 100 companies with 10+ years of consecutive dividend increases. Average yield is 2.5% versus 1.5% for S&P 500, with lower volatility and a 15-year average annual total return of 11%.
verified_user Key Points
- Income-focused investment strategy
- High yield vs dividend growth approaches
- Generally lower volatility than broad market
- Dividend aristocrats have 25+ years of consecutive increases