Last Updated on August 15, 2025
If you’re looking to generate consistent passive income while diversifying your portfolio, investing in the best ETFs for dividends is one of the smartest moves in 2025. These funds offer stability, regular cash flow, and long-term growth — all in one simple package.
In this article, we’ll break down the top 5 dividend-paying ETFs in the US and EU, explain their benefits, and help you choose the right ones for your investment goals. We’ll also tell you where to buy each ETF, even if you’re new to investing.
What Are Dividend ETFs and Why Should You Invest in Them?
Dividend ETFs are exchange-traded funds that invest in stocks known for paying regular dividends — a portion of a company’s profits paid to shareholders. Instead of buying individual dividend stocks, these ETFs provide built-in diversification and often lower volatility.
Why investors love dividend ETFs in 2025:
- Steady passive income from quarterly (or even monthly) payments
- Reduced risk through diversification
- Reinvestment options for compounding returns
- Accessibility via online brokerages and investing apps
With inflation concerns and market volatility still affecting global markets, dividend ETFs remain a resilient source of income and value.
Top 5 Best ETFs for dividends in the US and EU (2025)
With dozens of dividend ETFs available on the market, it can be overwhelming to figure out which ones truly deliver in terms of yield, stability, and long-term performance. In this section, we’ve done the research for you—highlighting the top 5 dividend-paying ETFs in both the United States and the European Union for 2025.
Each ETF listed below is selected based on its dividend yield, historical performance, fund composition, and reliability. Whether you’re a U.S.-based investor or based in Europe, you’ll also find guidance on which platforms you can use to buy the best ETFs for dividends, so you can get started right away.
Let’s dive into the most promising dividend ETFs that can help grow your passive income this year.
Top 5 US Dividend ETFs (2025)
| ETF | Dividend Yield | Key Features | Where to Buy |
|---|---|---|---|
| SCHD – Schwab U.S. Dividend Equity ETF | ~3.8% | Focuses on quality U.S. companies with consistent dividends. Low fee (0.06%). | Schwab, Robinhood, Fidelity, M1 Finance |
| VYM – Vanguard High Dividend Yield ETF | ~3.5% | Broad exposure to U.S. large-cap high dividend stocks. | Vanguard, TD Ameritrade, SoFi Invest |
| DVY – iShares Select Dividend ETF | ~4.0% | Strong dividend history, favors mid-cap stocks. | E*TRADE, Charles Schwab, Interactive Brokers |
| NOBL – ProShares S&P 500 Dividend Aristocrats | ~2.5% | Tracks companies with 25+ years of dividend increases. | Fidelity, Webull, ProShares Direct |
| HDV – iShares Core High Dividend ETF | ~4.1% | Focused on high-quality U.S. dividend-paying firms. | Ally Invest, M1 Finance, iShares platform |
Top 5 EU Dividend ETFs (2025)
| ETF | Dividend Yield | Key Features | Where to Buy |
|---|---|---|---|
| iShares Euro Dividend UCITS ETF (IDVY) | ~4.5% | Eurozone companies with high dividends. | DEGIRO, Interactive Brokers, XTB |
| SPDR S&P Euro Dividend Aristocrats ETF | ~3.8% | Invests in EU firms with consistent dividend growth. | eToro, Trade Republic, Scalable Capital |
| Xtrackers Euro Stoxx Select Dividend 30 ETF | ~5.1% | Targets 30 highest-yielding Eurozone companies. | DEGIRO, FinecoBank, Saxo Bank |
| Lyxor Stoxx Europe Select Dividend 30 ETF | ~4.9% | Low-cost exposure to top European dividend stocks. | BUX Zero, iBroker, IG Markets |
| Amundi MSCI Europe High Dividend UCITS ETF | ~4.2% | Pan-European focus, high dividend sustainability. | Amundi Direct, DEGIRO, Interactive Brokers |
Benefits and Risks of Dividend ETFs
✅ Benefits
- Consistent Cash Flow — Quarterly (and sometimes monthly) payouts
- Low Maintenance — No need to manage individual stocks
- Built-In Diversification — Reduce exposure to single-company risk
- Great for Retirement Planning — Passive income supports long-term goals
⚠️ Risks
- Dividend Cuts: Companies can lower or suspend dividends during downturns
- Market Volatility: ETF prices still fluctuate with the market
- Taxation: Some dividends may be taxed higher depending on the country
How to Choose the Best ETFs for dividends for Your Goals
To pick the best ETF for your situation, consider:
| Factor | Why It Matters |
|---|---|
| Dividend Yield | Higher yield = more income, but may mean more risk |
| Dividend Growth | Growing dividends can protect against inflation |
| Expense Ratio | Lower fees = more return to you |
| Portfolio Composition | Choose sectors or regions that align with your outlook |
| Reinvestment Options | Look for brokers that support automatic DRIPs (Dividend Reinvestment Plans) |
FAQs About Investing in Dividend ETFs
Are dividend ETFs good for beginners?
Yes. They’re less risky than individual dividend stocks and easy to manage.
How often do I get paid?
Most dividend ETFs pay quarterly, though some offer monthly distributions.
Can I hold these ETFs in tax-advantaged accounts?
Absolutely. U.S. investors can use Roth IRAs or 401(k)s, and EU investors can use ISAs, PEA accounts, etc., depending on the country.
What’s the difference between dividend yield and total return?
Dividend yield = income payout. Total return = income + price appreciation. Don’t ignore the latter.
Final thoughts
In 2025, dividend ETFs remain one of the best tools for generating steady passive income while keeping your portfolio diversified and resilient.
Whether you’re investing in the U.S. or Europe, the ETFs listed above offer strong yields, dependable payouts, and accessibility through major platforms. By choosing wisely and reinvesting dividends, you can build long-term wealth and financial freedom.