Three Dividend ETFs Beat S&P 500 Over Past Year

The iShares Select Dividend ETF, the Schwab U.S. Dividend Equity ETF, and the Vanguard High Dividend Yield ETF each outperformed the S&P 500 over the year ended October 23, 2026. While the benchmark index returned 14%, these three large-cap dividend funds delivered one-year total returns ranging from 17% to 35%, according to data from The ETF Examiner.

All three funds manage assets exceeding $10 billion. The Vanguard High Dividend Yield ETF held $99.19 billion in net assets as of its July 31, 2026 filing, while the Schwab U.S. Dividend Equity ETF reported $94.95 billion as of May 31, 2026. The iShares Select Dividend ETF managed $23.47 billion as of July 31, 2026. Their trailing yields span from 2.3% to 3.3%, reflecting past twelve-month payouts relative to current prices.

The Schwab U.S. Dividend Equity ETF posted the strongest one-year return at 35%. This fund tracks the Dow Jones U.S. Dividend 100 Index, which requires companies to have paid dividends for at least ten consecutive years and ranks them on cash flow to debt, return on equity, and dividend growth. Its top holdings include Qualcomm at 7%, Texas Instruments at 6%, and UnitedHealth at 5%. Despite its high return, its yield contracted to 3.0% because price gains outpaced payout growth.

The iShares Select Dividend ETF returned 18% over the same period. It tracks the Dow Jones U.S. Select Dividend Index, which weights stocks by dividend dollars paid rather than market size. This methodology favors cash-rich businesses, resulting in a portfolio with significant exposure to financials at 26% and utilities at 22%. The fund yields 3.3%, the highest of the three, but its expense ratio of 0.38% reduces net income for shareholders.

The Vanguard High Dividend Yield ETF returned 17% over the past year with a trailing yield of 2.3%. It tracks the FTSE High Dividend Yield Index, which holds over 400 stocks weighted by market value. This broad diversification limits the impact of individual dividend cuts. Its top position is Broadcom at 7%, followed by JPMorgan Chase at 4% and ExxonMobil at 3%.

Over a five-year horizon, none of these funds matched the S&P 500's return of 80%. The Vanguard fund led the group with a 72% gain, followed by the Schwab fund at 62% and the iShares fund at 61%. This divergence highlights that dividend strategies often lag during periods when low-yielding growth companies drive market leadership. However, the recent one-year outperformance suggests a shift toward cash-paying businesses in sectors like banks, energy, and healthcare.

Investors must weigh these performance metrics against portfolio construction risks. The iShares fund’s concentration in rate-sensitive utilities makes it vulnerable to interest rate changes. The Schwab fund’s reliance on a concentrated top ten means sharp moves in tech stocks can significantly impact overall returns. The Vanguard fund offers the broadest diversification but carries the lowest yield among the three.