A subscriber asked about current evidence that high-dividend stocks outperform the market. To investigate, we compare performances of 10 exchange-traded funds (ETFs) holding high-dividend stocks to that of SPDR S&P 500 (SPY) as a proxy for the U.S. stock market. The high-dividend stock ETFs, from oldest to newest, are:
- iShares Select Dividend ETF (DVY)
- Invesco Dividend Achievers ETF (PFM)
- SPDR S&P Dividend ETF (SDY)
- Vanguard Dividend Appreciation Index Fund (VIG)
- Vanguard High Dividend Yield ETF (VYM)
- WisdomTree Dividend ex-Financials ETF (DTN), dead since January 2022
- iShares Core High Dividend ETF (HDV)
- Schwab U.S. Dividend Equity ETF (SCHD)
- ProShares S&P 500 Dividend Aristocrats ETF (NOBL)
- iShares Core Dividend Growth ETF (DGRO)
For each of these ETFs, we compare average monthly total (dividend-reinvested) return, standard deviation of monthly returns, monthly return-risk ratio (average monthly return divided by standard deviation), compound annual growth rate (CAGR) and maximum drawdown (MaxDD) to those for SPY over matched sample periods. Using monthly total returns for the 10 high-dividend stock ETFs and SPY over available sample periods through August 2025, we find that:
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