4 Best Dividend ETFs of August 2023

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by Eric Burdon
Graphic on blue background showing different investment elements and letters 'ETF'
Image by Freepik

Obviously every investor wants to be seeing a return off of their investment, but one of the best ways to do that is through dividend ETFs. ETFs - short for exchange-traded funds - emphasise different things about a business. In some cases it does look at growing companies that could boost their dividends down the line, while others might look to grow to an international level.

Regardless of what they are focusing on, between many data points and research, there are several dividend ETFs that showed a lot of promise last month. Here are some of the best dividend ETFs.

Read: What is the value of an ESG score in Banking?

SPDR Portfolio S&P 500 High

This ETF is tricky in that the shares of the fund haven’t appreciated much at all since 2018, but clearly the fund continues to pay a very high dividend, offering great returns. It even charges very low fees.

On an annual basis, the fund has consistently returned 5.5% over the past years, and the current yield percentage (4.7%) makes it all around a good choice for investors who care more about the yield and want growth in other parts of their portfolio. 

Read: What is ESG Banking? All You Need to Know

Vanguard International High Dividend Yield

Scratching at the heels of SPDR, is Vanguard’s own high dividend yield. Offering 4.47% return, the international stocks have consistently outperformed country-centric stocks. Because of the high yield, Vanguard’s is especially appealing and isn’t as complex as SPDR’s.

What Vanguard focuses on more is diversification by having a portfolio of about 1,300 stocks, having more company stocks than any other fund on this list. 

That strategy clearly has been paying off, especially when Vanguard chooses particular markets to invest in. About 80% of their holdings are in developed markets while the remaining 20% are in emerging market companies.

Related: ESG Investing: The Transition from Stewardship to Integration

WisdomTree U.S. Quality Dividend Growth Fund

Even though the expense ratio is higher than its rivals at 0.28%, that is the only point of criticism this $9.7 billion fund has against it. This fund has made a name for itself by offering that expense ratio, but also by offering high returns during some key points in the market.

The key to this fund's success boils down to the fact the fund looks forward and predicts future dividend hikes. That much is clear on WisdomTree’s site which says clearly that large tech companies are today’s economic leader’s. These leaders also happen to be companies that have been leading the charge of dividend growth too.

The fund’s year-to-date total return is an incredible 11.7%, smashing even the famously hard-to-beat S&P 500’s annualised returns at one point.

Related: Top 5 ESG Investment Trends in 2023

FCF International Quality ETF

As the name suggests, this fund invests in foreign stocks that the fund considers high quality, with a strong free cash flow and sustainable profitability. What is nice about this particular fund is that it evaluates “high quality” based on ESG issues as well as traditional fundamentals.

With 154 holdings, equal portions of these stocks are growth stocks and value stocks and they all have broad diversity in industries like financial services, energy, healthcare, industrial, and consumer discretionary. Overall, this fund is excellent if you want to get a good taste for what ESG can offer in ETFs and how it can be translated to investor dividends.

Featured: What is the effect of ESG rating changes on stock returns?

Many ETFs To Pick From

As an investor, it’s important to do research and there are a lot of options to choose from. What matters the most though is despite the large amount of options, you go with the funds that fit with your values and your own financial goals. When you do that, you can’t go wrong with your decision.

Keep track of ESG-related finance news at our Sustainable Finance and Investors pages.


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