Among the dividend funds listed, the Global X SuperDividend™ US ETF (DIV) stands out with the highest trailing twelve-month (TTM) yield. This fund aims to provide investors with exposure to 100 of the highest dividend-yielding equity securities in the U.S.
Understanding Dividend Yield
When evaluating "highest paying," the key metric is the dividend yield, specifically the TTM yield. The TTM yield represents the total dividends paid per share over the past 12 months, divided by the current share price. A higher yield indicates a larger dividend payment relative to the fund's price.
Top-Yielding Dividend Fund
Based on recent data, here's a comparison of several dividend index funds, highlighting their TTM Yield:
| Fund Name | Total Return 1 Year | TTM Yield |
|---|---|---|
| Global X S&P 500® Quality Dividend ETF QDIV | 11.36% | 2.78% |
| Global X SuperDividend™ US ETF DIV | 10.21% | 5.55% |
| Invesco Dividend Achievers™ ETF PFM | 18.44% | 1.56% |
| Invesco Dow Jones Industrial Avg Div ETF DJD | 15.12% | 2.92% |
As the table illustrates, the Global X SuperDividend™ US ETF (DIV) currently offers the highest TTM yield at 5.55% among these options, making it the highest paying dividend fund in this comparison.
Considerations Beyond Yield
While a high dividend yield is attractive, it's essential to consider other factors when choosing a dividend fund:
- Total Return: This includes both dividend payments and capital appreciation. A fund with a lower yield might have stronger capital growth, leading to a higher total return. For instance, the Invesco Dividend Achievers™ ETF PFM had a significantly higher 1-year total return despite a lower TTM yield.
- Fund Strategy: Understand how the fund selects its holdings. Some focus on quality dividends, others on high yield, and some on dividend growth.
- Risk: High-yield funds can sometimes carry higher risks, as high dividends may indicate underlying company struggles or be unsustainable.
- Expense Ratio: This is the annual fee charged by the fund, which can eat into your returns.
Choosing a dividend fund should align with your investment goals, risk tolerance, and time horizon.
