Morningstar

The Best Dividend Funds to Buy Now

These dividend ETFs and mutual funds earn high ratings from Morningstar.

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Collage illustration with the text "Dividend Funds" at the center and a portfolio and graphical elements in the background.
Securities in This Article
Fidelity High Dividend ETF
(FDVV)
Vanguard S&P 500 ETF
(VOO)
T. Rowe Price Dividend Growth I
(PDGIX)
Vanguard High Dividend Yield ETF
(VYM)
State Street® SPDR® S&P® Dividend ETF
(SDY)

Dividend stocks are the Dolly Parton of investing: Everyone seems to like them.

Many retirees rely (at least somewhat) on the regular income that

dividend
stocks generate. Nonretirees, meanwhile, enjoy “getting paid to wait”—collecting regular income from quarterly dividends while holding on for stock price appreciation.

After lagging the broad-based Morningstar US Market Index in 2025, returns for the Morningstar Dividend Yield Focus Index (a collection of quality stocks with stable dividends) have been catching up. Dividend stocks have benefited from the market rotation toward areas like energy, basic materials, and industrials—sectors that are also rich in dividends.

Because dividend payers tend to maintain solid balance sheets and stable cash flows, they make good defensive investments. They’re often less volatile than non-dividend-paying stocks, too. And for many investors, the reliable income that dividend stocks offer makes up for lagging performance.

15 Best Dividend ETFs and Mutual Funds

Investors interested in getting exposure to dividend stocks through a managed product can pick among many good dividend exchange-traded funds and mutual funds.

These dividend ETFs and mutual funds focus on US stocks and have at least one share class that earned top Morningstar Medalist Ratings of Silver or Gold that were 100% analyst-driven as of March 23, 2026.

  1. Capital Group Dividend Value ETF CGDV
  2. Columbia Dividend Income CDDYX
  3. Fidelity High Dividend ETF FDVV
  4. Schwab U.S. Dividend Equity ETF SCHD
  5. SPDR S&P Dividend ETF SDY
  6. T. Rowe Price Dividend Growth ETF TDVG
  7. T. Rowe Price Dividend Growth PDGIX
  8. Vanguard Dividend Appreciation ETF VIG
  9. Vanguard Dividend Appreciation Index VDADX
  10. Vanguard Dividend Growth VDIGX
  11. Vanguard High Dividend Yield ETF VYM
  12. Vanguard High Dividend Yield Index VHYAX
  13. WisdomTree US LargeCap Dividend ETF DLN
  14. WisdomTree US MidCap Dividend ETF DON
  15. WisdomTree US SmallCap Dividend ETF DES

High-Dividend Stocks Versus Dividend-Growth Stocks

Most funds on our list of the best dividend ETFs and mutual funds take one of two approaches to investing.

The first group invests in high-dividend stocks. High-dividend stocks typically come from more mature businesses that choose to pay out profits rather than reinvest them. Investors will often find these companies in the financial-services, energy, utilities, and industrials sectors. High-dividend stocks come with tantalizing yields but carry some risk. Most notably, high-dividend stocks in economically sensitive sectors may be vulnerable during an economic slowdown. Moreover, high-yielding stocks can face interest rate risk: When rates trend up, investors may swap high-income-producing stocks for bonds.

The second group of names on our list of the best dividend ETFs and mutual funds focuses on dividend-growth stocks. Dividend-growth stocks don’t usually boast robust yields like high-dividend stocks do, but they come from companies that are usually financially healthy and that have raised their dividends over time. As such, dividend-growth stocks generally exhibit some resilience during market downturns and economic slowdowns.

When researching dividend-stock mutual funds and ETFs, be sure to understand which approach the fund takes. You can find this information in a Morningstar fund or ETF report on Morningstar.com. Look under the Fund Analysis tab.

Do Investors Need Dividend ETFs or Mutual Funds?

Dividend-paying companies are often larger firms whose stocks are popular holdings among large-cap mutual funds and ETFs. As a result, investors who own large-cap funds may already hold a sizable position in dividend stocks. For example, Vanguard Dividend Appreciation and Vanguard S&P 500 ETF VOO both count Broadcom AVGO, Microsoft MSFT, and Apple AAPL among their top five holdings.

That doesn’t mean investors shouldn’t add a dividend fund to their portfolios if they already have exposure to large-company stocks. However, investors should be aware of what adding a dividend-stock fund may do to the complexion of their current portfolio mix.

Why Dividend-Growth Stocks Aren’t Just for Income Investors

These high-quality stocks can make powerful long-term portfolio anchors.
4m 22s

How to Find More of the Best Dividend ETFs and Mutual Funds for the Long Term

Given their high Morningstar Medalist Ratings, we expect the top-rated mutual funds and ETFs on our list to outperform over a full market cycle.

That being said, investors may want to expand their search for dividend-stock funds beyond this list, using parameters that matter to them. Here are two additional ways to find dividend ETFs and mutual funds to investigate further.

  • Some investors may prefer a list of highly rated funds that invest in dividend stocks around the globe, not just in US names. Using the Morningstar Investor Screener, select Investment Type (either ETF or Mutual Fund), enter the Keyword dividend in the Search Securities section, set Asset Class to International Equity, and check both Gold and Silver beneath Morningstar Medalist Rating.
  • Want to find a complete list of dividend-stock ETFs or mutual funds available today, not just those with our highest Medalist Ratings? Using the Morningstar Investor Screener tool, select Investment Type (either ETF or Mutual Fund) and enter the Keyword dividend in the Search Securities section.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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