■ ETF · August 16, 2026
HDV, FDL, DTD Outperform S&P 500 in 2026 with Yields Up to 3%
High-dividend ETFs HDV, FDL, and DTD have beaten the S&P 500 in 2026, with yields near 3%, as rotation into dividend sectors drives gains.
Dividend ETFs Outperform in 2026
After a decade of underperformance, dividend-focused ETFs are leading the market in 2026. The iShares Core High Dividend ETF (HDV), First Trust Morningstar Dividend Leaders Index Fund (FDL), and WisdomTree U.S. Total Dividend Fund (DTD) have all outpaced the S&P 500 year-to-date. As of August 7, HDV is up 20%, FDL 19%, and DTD 16%, compared to a 13% gain for the SPDR S&P 500 ETF (SPY). These funds offer yields around 3%, with FDL and DTD closer to 2%.
HDV: Quality Screened Dividend Payers
HDV tracks the Morningstar Dividend Yield Focus Index, which applies economic moat and financial health screens to dividend-paying stocks. This approach filters out companies with fragile balance sheets. The fund holds 75 U.S. equities and manages about $15 billion in assets, with a low expense ratio of 0.08%. Its dividend yield is near 3%.
Top holdings include Exxon Mobil (8%), Chevron (6%), Johnson & Johnson (6%), and AbbVie (5%). Consumer staples like Procter & Gamble, Coca-Cola, Altria, and Philip Morris each represent around 4%. This portfolio is heavily weighted toward energy and defensive sectors, which have benefited from rotation. However, the fund has significant sector concentration, with about 20% in energy alone, which could be a risk if oil prices decline.
FDL: Dividend-Weighted Approach
FDL tracks the Morningstar Dividend Leaders Index, which weights companies by the total dollar amount of dividends paid, rather than market cap. This tilts the portfolio toward large dividend payers. The fund has an expense ratio of 0.40% and a trailing yield near 2%. Its top three holdings—Chevron (8%), Verizon (7%), and Philip Morris (6%)—account for over 20% of assets. Q2 2026 distributions were $0.4732 per share, up from $0.4005 in Q1.
FDL is up 19% year-to-date and 28% over the past year. The dividend-weighting strategy concentrates capital in companies with strong payout capacity, but it also leads to a more sector-concentrated portfolio, with notable exposure to telecom and tobacco.
DTD: Broad Dividend Coverage with Monthly Payouts
DTD tracks the WisdomTree U.S. Dividend Index, which covers the entire dividend-paying U.S. market across all market caps, weighting by cash dividends paid. Unlike HDV and FDL, it does not filter for yield, so it includes mega-cap tech names that pay dividends. Top holdings include Microsoft (4%), NVIDIA (4%), and JPMorgan Chase (3%). The expense ratio is 0.28%, and distributions are paid monthly. In 2026, payouts through July totaled $0.93 per share, ahead of the same period last year.
DTD is up 16% year-to-date, still ahead of the S&P 500 but behind the other two funds. Its yield is around 2%, reflecting its broader exposure. The monthly distribution schedule is a feature for investors seeking regular income, though monthly amounts have varied from $0.07 to $0.21 per share.
What it means for income investors
The outperformance of these dividend ETFs in 2026 marks a shift from the growth-led market of the past decade. With yields near 3% and gains exceeding the S&P 500, they offer a combination of income and capital appreciation. However, sector concentration and varying construction rules mean these funds carry different risk profiles, and past performance does not guarantee future results.
Reporting based on: 24/7 Wall St.. Figures verified against market data where available.