There are 17 ETFs that had more than $100 billion in assets as of September 4, with two others approaching this milestone. The two funds are the Vanguard FTSE Emerging Markets ETF (VWO ) and the Vanguard Dividend Appreciation ETF (VIG ). VIG caught my attention as the Federal Reserve is likely to resume its rate-cutting program later this month.
We believe investors will increasingly focus on dividend-paying securities as bond yields become less competitive. According to State Street Investment Management, dividend ETFs gathered $2.3 billion of net inflows in August, the most of any smart-beta investment approach.
What’s Inside Dividend ETFs Might Surprise
VIG tracks an index of U.S. companies that have raised dividends for at least 10 consecutive years. While diversified across sectors, the fund is concentrated in a few of them. It might surprise some, but information technology is the largest at 27% of assets, followed by financials (23%), health care (15%), industrials (12%), and consumer staples (10%).
Meanwhile, the fund has limited exposure to energy (3%), materials (3%), utilities (3%) and communications services (1%). The dividend ETF was up 8.3% year to date as of September 3 and gathered $350 million of net inflows in August.
The second-largest dividend ETF is the Schwab US Equity ETF (SCHD ), which manages $73 billion in assets. SCHD tracks an index focused on the dividend quality and sustainability of its constituents. While this sounds like the SCHD and VIG should have similar portfolios, they do not.
Energy (19% of assets) is a top weighting for SCHD, followed by consumer staples (19%) and health care (16%). Meanwhile SCHD has just 9% exposure to information technology. SCHD was up just 3.8% thus far in 2025 and had $185 million of net outflows in August.
Tech Companies Pay Dividends Too
Many other dividend ETFs are diversified across sectors, but not all of them. Two such funds caught my eye. The ProShares S&P Technology Dividend Aristocrats ETF (TDV ) and the Amplify Natural Resources Dividend Income ETF (NDIV ).
TDV owns shares of information technology companies that have raised their dividend for at least seven consecutive years. The portfolio consists of 38 companies, which was more than I expected, given that the technology sector is thought of for its growth, not income generation. According to S&P Dow Jones, in 2024 the information technology sector had the third-fastest growth rate in the S&P 1500. Yet dividend payouts remained relatively low, creating room for further expansion.
The ProShares ETF managed $250 million in assets and was up 11% year-to-date through September 4. Despite a strong recent record, there were negligible flows in August. Given the fund launched in late 2019, we think many investors are still not aware of the strategy.
NDIV Offers Global Commodity Related Exposure
Meanwhile, NDIV focuses on high-dividend yielding companies in the energy and materials sectors. Companies in these sectors generate significant free cash flow due to rising commodity prices that are often returned to investors via dividends. Recently, NDIV had 50% of its assets in upstream energy companies and 33% in midstream and downstream companies, with the rest in chemicals companies. Approximately two-thirds of assets were in the U.S. but Canada (13%) and the U.K (7%) were among the other markets well-represented.
NDIV just passed its three-year anniversary but remains small, with approximately $25 million in assets. We think, with a 5% distribution rate and exposure to stocks overlooked by other dividend ETFs, it warrants further scrutiny. NDIV was up 9.3% thus far in 2025.
VettaFi LLC (“VettaFi”) is the index provider for NDIV, for which it receives an index licensing fee. However, NDIVis not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of NDIV.
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