Investors seeking reliable income streams may overlook three ETFs—VIG, SDY, and SCHD—each with consistent dividend increases over multiple decades. Despite strong historical performance, these funds remain underappreciated in current market discussions.
- VIG has increased dividends for 17 consecutive years with a 7.3% average annual growth rate
- SDY has a 15-year dividend growth streak and a 6.9% average growth rate
- SCHD has 18 consecutive years of dividend increases and a 7.5% average annual growth rate
- All three ETFs maintain expense ratios below 0.08%
- Top holdings include JNJ, VZ, and PG—companies with strong dividend histories
- Sector exposure to utilities, consumer staples, and telecom supports income resilience
Amid rising interest rate concerns and market volatility, income-focused investors are turning to dividend growth strategies. Yet three ETFs—VIG, SDY, and SCHD—continue to be overshadowed despite their proven ability to deliver steady dividend appreciation over extended periods. These funds are designed to hold companies with a history of consistently increasing payouts, a trait that provides both income stability and long-term capital appreciation potential. VIG, the Vanguard High Dividend Yield ETF, has increased its dividend annually for 17 consecutive years, with a current yield of 2.8% and a weighted average dividend growth rate of 7.3% over the past decade. SDY, the Schwab U.S. Dividend Equity ETF, has maintained a 15-year streak of dividend increases, offering a 3.1% yield and a 6.9% average annual growth rate. SCHD, the Schwab U.S. Dividend Equity ETF, stands out with 18 years of consecutive dividend hikes and a yield of 3.4%, backed by a 7.5% average growth rate over the same period. The underlying holdings of these ETFs span defensive sectors such as utilities, consumer staples, and telecommunications—industries known for predictable earnings and resilient cash flows. This sector concentration contributes to their consistent dividend performance, even during economic downturns. For example, SCHD’s top holdings include Johnson & Johnson, Verizon Communications, and Procter & Gamble, all of which have long-standing dividend growth records. The market impact of these funds is not in headline-grabbing moves but in their role as core holdings for retirement and income portfolios. Their low expense ratios—VIG at 0.07%, SDY at 0.07%, and SCHD at 0.06%—further enhance their appeal. As year-end portfolio rebalancing approaches, these ETFs offer a strategic, low-cost entry point for investors focused on long-term income generation.