Can dividend-focused exchange traded funds (ETFs) bring you closer to your retirement goals? They absolutely can, and a specific group of dividend funds are ideal for selective wealth builders in the 2020s.
Today, I want to turn your attention to dividend growth ETFs, which comprise a small segment of the dividend fund universe. I will only feature ETFs that include high-quality stocks and companies with growth characteristics, which may include track records of growing their dividend distributions.
It’s an exclusive list of top-tier dividend growth funds that must meet the strictest standards for current and soon-to-be retirees. You’re cordially invited to check them out and think about building portfolio positions in one or more of these exemplary dividend-enhanced ETFs.
WisdomTree U.S. Quality Dividend Growth Fund (DGRW)
Since the WisdomTree U.S. Quality Dividend Growth Fund (NASDAQ:DGRW | DGRW Price Prediction) has the words “Quality” and “Dividend Growth” in its name, you can bet we’re off to a good start. As it turns out, the DGRW ETF is geared toward “dividend-paying large-cap companies with growth characteristics in the U.S. equity market.”
The WisdomTree U.S. Quality Dividend Growth Fund is an excellent portfolio diversifier with 200 holdings. In the DGRW ETF, you’ll find well-established names like Coca-Cola (NYSE:KO), Apple (NASDAQ:AAPL), Exxon Mobil (NYSE:XOM), and Microsoft (NASDAQ:MSFT).
I can’t claim that every single member of the WisdomTree U.S. Quality Dividend Growth Fund’s holdings list has grown its dividend payments. However, gigantic companies like Apple and Exxon Mobil certainly have grown their earnings and should continue to expand in the future.
When the quality level is high, earnings and share-price growth is a likely outcome. As evidence of this, we can observe that the DGRW ETF’s share price rose 70% over the past five years.
Furthermore, the WisdomTree U.S. Quality Dividend Growth Fund only deducts an annualized expense ratio of 0.28%, which means you’ll end up paying $0.28 per year per $100 invested in the fund. That’s not exorbitant when we consider the DGRW ETF’s 1.42% annual dividend yield, which will easily make up for the operating fees.
Clearly, there’s a lot to like about the WisdomTree U.S. Quality Dividend Growth Fund: good yield, reasonable fees, and broad diversification into blue-chip businesses. For these reasons, the DGRW ETF sits on top of today’s list of funds to help you retire in comfort.
ProShares S&P Technology Dividend Aristocrats ETF (TDV)
Now, we’re going to take dividend growth more literally. With the ProShares S&P Technology Dividend Aristocrats ETF (CBOE:TDV), your portfolio can get exposure to U.S. technology companies that have “not only paid but grown dividends for 7+ years.”
A comfortable retirement will likely require you to build your wealth, and technology stocks are known for gaining value in the long term. The TDV ETF narrows its focus down to reliable tech firms that can afford to increase their dividend distributions on a consistent basis.
I counted 39 stocks on the holdings list of the ProShares S&P Technology Dividend Aristocrats ETF. Some of the members of that holdings list are Cisco Systems (NASDAQ:CSCO), International Business Machines (NYSE:IBM), Broadcom (NASDAQ:AVGO), and Qualcomm (NASDAQ:QCOM).
You might not be blown away by the TDV ETF’s 1.06% annual dividend yield, but don’t overlook this fund. During the past five years, the ProShares S&P Technology Dividend Aristocrats ETF’s share price is up by 65%.
That’s a powerful rationale to add the TDV ETF to your retirement portfolio in 2026. So, if you’re willing to pay the fairly reasonable 0.45% annual expense ratio, the ProShares S&P Technology Dividend Aristocrats ETF (TDV) is a savvy choice for sensible tech-stock participation.
iShares Core Dividend Growth ETF (DGRO)
The concept behind the iShares Core Dividend Growth ETF (NYSEARCA:DGRO) is simple but brilliant for retirement investors. With this fund, you can get instant access to companies with a “history of sustained dividend growth and that are broadly diversified across industries.”
Thus, you could bulk up your technology holdings with TDV and then add shares of DGRW and DGRO for wider diversification. Again, I won’t promise that all 404 members of the iShares Core Dividend Growth ETF’s holdings list are dividend growers, but I see plenty of top-quality names on there.
After all, you’ll probably in good financial condition if you’re invested in mega-sized businesses like Home Depot (NYSE:HD), Procter & Gamble (NYSE:PG), JPMorgan Chase (NYSE:JPM), and Merck (NYSE:MRK). The iShares Core Dividend Growth ETF brings you these and many more easily recognizable names.
Historically speaking, owning shares of the DGRO ETF has worked out well. The fund’s share price has expanded by 58% over the past five years, so the iShares Core Dividend Growth ETF looks like a solid growth vehicle for retirees and near-retirees.
Finally, I’ll leave you with a couple of notable numbers. The DGRO ETF only incurs an annual expense ratio of 0.08%, which is delightfully low. On top of all that, the iShares Core Dividend Growth ETF advertises a dividend yield of around 2%, which is the cherry on top of the sundae when you’re ready to retire in comfort.
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