These 3 High-Yield Dividend ETFs Beat the S&P 500. Here Are the Best Buys of April.
The technology, financial, telecommunications, and consumer discretionary sectors account for 65% of the S&P 500. And all four sectors are down between 4.9% and 10.8% year to date. Exchange-traded funds (ETFs) with heavy exposure to value stocks have underperformed the S&P 500 this year. Especially ETFs that hold energy stocks.
Here are three ETFs that stand out as April buys, and how to decide which one fits your risk tolerance and investment goals.
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I Schwab US Dividend Equity ETF (NYSEMKT: SCHD) It is mainly focused on the energy, consumer staples, and health care sectors because many companies in these sectors use dividends to return money to shareholders.
Big bets on value sectors helped the ETF earn a whopping 3.3% yield. Over time, these low-growth sectors tend to underperform the S&P 500. But these sectors shine during market sell-offs, when investors look for stocks with a lower risk rating.
As you can see from the chart, the Schwab US Dividend Equity ETF is up more than 10% year to date — largely due to its 19.9% weighting in the thermal energy sector. By comparison, the S&P 500 is down 5% year to date, while the consumer discretionary and financials sectors are up double digits.
Like the Schwab US Dividend Equity ETF, the largest sector average iShares Core High Dividend ETF (NYSEMKT: HDV) strength. But the main difference is that the Schwab US Dividend Equity ETF is more diversified among the big oil Chevronseveral exploration and production companies, and refiners. The lowest price of shares of iShares Core High Dividend ETF’s energy sector. ExxonMobilChevron, too ConocoPhillips — comprising 18.3 percent of the total fund.
|
Sector |
Schwab US Dividend Equity ETF |
iShares Core High Dividend ETF |
Company Vanguard High Dividend Yield ETF |
|---|---|---|---|
|
Power |
19.9% |
23.3% |
9.6% |
|
Consumer staples |
18.5% |
24% |
9.4% |
|
Health care |
16.2% |
17.3% |
12.9% |
|
Industries |
12.1% |
2% |
13.8% |
|
Finance |
9.7% |
10.7% |
19.4% |
|
Buyer’s choice |
8.5% |
6% |
10.1% |
|
Technology/communications |
12.5% |
6.1% |
16% |
|
Building materials |
2.7% |
1.1% |
2.3% |
|
Resources |
0% |
9.2% |
6.5% |
Data sources: Charles Schwab, BlackRock, Vanguard.
Similarly, a buyer sells shares Procter & Gamble, Philip Morris, Coca-Cola, PepsiCoagain Altria The iShares Core High Dividend ETF offers consumers core exposure — comprising 19.6% of the ETF. Again Johnson & Johnson, AbbVieagain Merck they make up 15.6% of the combined ETF, which is mostly healthcare.
In this case, the iShares Core High Dividend ETF is an excellent buy for investors who want exposure to an industry-leading dividend-paying value stock rather than a large number of stocks. The iShares Core High Dividend ETF yields 2.8%, which is higher, but lower than the Schwab US Dividend Equity ETF.
I Company Vanguard High Dividend Yield ETF (NYSEMKT: VYM) has the lowest expense ratio of the ETFs on this list at just 0.04% compared to 0.06% for the Schwab US Dividend Equity ETF and 0.08% for the iShares Core High Dividend ETF. But it also has a very low yield of 2.3%.
The main difference is the sector’s allocation — with the Vanguard High Dividend Yield ETF having very little exposure to energy and consumer staples — prefers to unlock income from high-quality technology stocks such as Broadcom or financial institutions such as JPMorgan Chase.
But finance and technology have been under pressure in 2026, so it’s no surprise that the fund hasn’t ended the year so far. Even with this year’s muted gains and lower yield, the Vanguard High Dividend Yield ETF is still in a close tie with the iShares Core High Dividend ETF for five-year total return (gross plus dividends), with both funds outperforming the Schwab US Dividend Equity ETF.
Overall, the Vanguard High Dividend Yield ETF is an excellent buy for investors who value diversification from high-yield dividend-paying stocks.
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Charles Schwab is an advertising partner of Motley Fool Money. JPMorgan Chase is the advertising partner of Motley Fool Money. Daniel Foelber has positions in Procter & Gamble and Schwab US Dividend Equity ETF and has the following options: short May 2026 $150 calls on Procter & Gamble and short May 2026 $160 calls on Procter & Gamble. The Motley Fool has positions in and recommends AbbVie, Chevron, JPMorgan Chase, Merck, and the Vanguard High Dividend Yield ETF. The Motley Fool recommends BlackRock, Broadcom, Charles Schwab, ConocoPhillips, Johnson & Johnson, and Philip Morris International and recommends the following options: short March 2026 $100 calls on Charles Schwab. The Motley Fool has a policy of disclosure.
These 3 High-Yield Dividend ETFs Beat the S&P 500. Here Are the Best Buys of April. was first published by The Motley Fool
