Last year didn’t end up being as pivotal as expected, with the market rallying to even higher highs, and there’s plenty of uncertainty surrounding 2026. If you want to win big while generating income from your portfolio, look into the Fidelity High Dividend ETF (NYSEARCA:FDVV | FDVV Price Prediction), Vanguard Real Estate Index Fund ETF (NYSEARCA:VNQ), and Schwab US Dividend Equity ETF (NYSEARCA:SCHD).
This year could indeed make or break the market rally. Interest rates are coming down, and the trend will accelerate if Jerome Powell is replaced by a Trump appointee as expected. Reduced interest rates will either stoke panic in tandem with lower jobs figures, or they will add even more fuel to the ongoing AI rally. Anyone saying they know which will be the case is lying.
However, what you can do to make the most out of 2026 is invest in reliable dividend stocks. The following three will deliver upside plus a reliable yield, and you’ll end up in the green long-term.
Fidelity High Dividend ETF (FDVV)
The Fidelity High Dividend ETF gives you exposure to large-cap and mid-cap stocks with high dividends and growing payouts. It uses a “smart beta” methodology that evaluates holdings using their dividend yield, payout ratio, and dividend growth rate.
FDVV is up 12.67% over the past year, and 14.97% including dividends. This is almost what the S&P 500 returned, but with a more attractive risk-reward setup. Tech stocks constitute only 26% of FDVV, whereas they constitute over 35% of the S&P 500. You’ll benefit from this lower exposure to tech if they correct in 2026. If not, you’ll still benefit from their growth while getting dividends.
FDVV has a 2.87% dividend yield. The expense ratio is very low at 0.15%, or $15 per $10,000. It’s a meaty pick if you want to reinvest dividends for the long run. This ETF contains dividend stocks with high dividend growth, so your holdings can snowball faster.
Vanguard Real Estate Index Fund ETF (VNQ)
If you’re looking for something more income-focused, VNQ is a surefire bet for 2026. Lower interest rates could reawaken the real estate sector and send real estate investment trusts (REITs) soaring once again.
These companies have been subdued for years due to high interest rates. Many expected these firms to collapse as they did in 2008, but that didn’t end up happening, as the industry learned a lot from it and is much stronger now. In fact, REITs continued generating positive cash flow and grew their dividends.
As interest rates come down, the looser monetary policy can supercharge them. VNQ has been flat for the past year, but I expect it will make strong progress as lower interest rates will also make high-yielding stocks more attractive. REITs must pay at least 90% of their taxable income as dividends. As a result, these companies maintain high dividends, and any increase in earnings translates into higher income for shareholders.
VNQ has a dividend yield of 3.92% and an ultra-low expense ratio of 0.13%, or $13 per $10,000.
Schwab US Dividend Equity ETF (SCHD)
The Schwab US Dividend Equity ETF was left behind by most of its dividend-paying peers. The situation is acute, considering SCHD’s capital appreciation has been rangebound for the past 4 years. Covered call ETFs and various other tech + dividend ETFs have done a lot better, and investors are taking a lower dividend yield for the improved performance.
That being said, SCHD still does not have a 1:1 replacement. The underperformance in the past few years should not rule out this stalwart from your portfolio. No other ETF has managed to attain such a strong dividend yield without leaning into an options overlay or a riskier strategy. If you factor in the dividends, SCHD has outperformed most covered call ETFs and “stronger” performers over the past 5 years, and I believe 2026 could be a breakout year where it makes up lost ground.
SCHD mostly missed out due to its lack of tech exposure, as tech stocks constitute 9.7% of its holdings. Almost every other sector has lagged tech, but the opposite can happen this year if the market rebalances in 2026, along with the changes in monetary policy.
SCHD gets you a 3.78% dividend yield with an expense ratio of just 0.06%, or $6 per $10,000.
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