6 Affordable ETFS for Dividend Aristocrats

The old proverb that warns against judging a book by its cover dates at least to ancient Rome, and it applies to subjects far beyond its literal meaning, including investments.

It’s easy for retail investors to grow mesmerized by the surface-level performance of hourly, daily or even annual, ups and downs of the market. While those shifts tell more than the cover story, it’s still only part of the story, and dividends can be another critical indicator of, and contributor to, value.

Over the past century, payments comprising a portion of cash proceeds from operations have made up 31% of the S&P 500’s total return on a pro-forma basis, according to S&P Global Research. (The statistic includes hypothetical returns for some periods, since the index itself wasn’t created until 1957.) During some decades, such as the 1940s and 1970s, dividends have made up more than half of returns, and thanks to the miracles of compounding, they can drive investors’ gains exponentially higher.

Compound for Pound

Including dividends, the S&P 500’s return from January 1930 to February 2025 would have been 9,584 points, compared with just 278 points excluding the payouts, according to the data. Investors seeking to take advantage of such multiples don’t have to find high-dividend stocks on their own: A number of exchange-traded funds offer simplified access.

They’re not all created equal, however. The following list highlights six funds that pair attractive price-to-earning ratios with holdings known for dividend quality, ranked from lowest to highest. While there’s only one ETF on the market that focuses solely on dividend aristocrats, companies that have raised dividends for 25 consecutive years or more, each of the funds offers access to firms with a strong payout record:

• iShares Select Dividend ETF (DVY): The fund, introduced by BlackRock in November 2003, has a price-to-earnings ratio of 15.23, based on trailing 12-month performance. It holds $20 billion in assets, giving investors access to 100 US stocks with five-year records of paying dividends, and has an expense ratio of 0.38%.
• Schwab US Dividend Equity ETF (SCHD): With a P/E ratio of 16.7, the fund holds $69.7 billion in assets and has an expense ratio of 0.06%. Built to track the Dow Jones 100 Dividend Index, which focuses on quality and sustainability of dividends, it was introduced in October 2011.
• Vanguard High Dividend Yield ETF (VYM): With a P/E ratio of 19.8, the fund holds $81.2 billion in assets and has an expense ratio of 0.06%. Designed to track the performance of the FTSE High Dividend Yield Index, which measures the investment return of common stocks with high dividend yields, it was introduced in November 2006.
• State Street SPDR S&P Dividend ETF (SDY): With a P/E ratio of 17.7, SDY holds $19.5 billion in assets and carries an expense ratio of 0.35%. It was introduced in November 2005 and attempts to provide results, before fees and expenses, that generally correspond to the S&P High Yield Dividend Aristocrats Index. 
• iShares Core High Dividend ETF (HDV): HDV has a P/E ratio of 20.7 and holds $11.6 billion in assets. Carrying an expense ratio of 0.08%, it was introduced in March 2011 and provides access to 75 dividend-paying domestic stocks screened for financial health.
• ProShares S&P 500 Dividend Aristocrats ETF (NOBL): NOBL has a P/E ratio of 21.3 and holds $11.4 billion in assets. Carrying an expense ratio of 0.35%, it was launched in October 2013 and is the only ETF focused exclusively on S&P 500 Dividend Aristocrats.