Exchange-traded funds have evolved from a niche product in the 1990s into one of the most widely used investment vehicles. JPMorgan estimates that roughly 17,000 listed ETFs existed globally as of end-April 2026, holding combined assets of just over $22 trillion. Their appeal lies in broad diversification and low costs: investors buy a basket of stocks that typically tracks an index such as the SMI or S&P 500, avoiding the need to assemble a portfolio manually or pay for active management.
US-based dividend ETFs have delivered strong long-term returns. YCharts, a US research firm, identified three funds among the best-performing dividend ETFs over the past decade. The First Trust Rising Dividend Achievers ETF, which tracks the Nasdaq US Rising Dividend Achievers Index, posted an annualized return of 16 percent and a total return of 333 percent over the period. The fund selects companies that have raised dividends over the past three and five years and posted positive earnings per share in the most recent fiscal year above the level three years earlier. Largest current positions include Applied Materials, KLA, Bank of New York Mellon and Bank of America. Its total expense ratio of 0.47 percent, however, is notably higher than competing products.
The Vanguard Dividend Appreciation ETF returned 243 percent in total, or 13 percent annualized, over the same decade, at a total expense ratio of just 0.04 percent. Top holdings include Apple, Broadcom, Microsoft, Eli Lilly, ExxonMobil and Johnson & Johnson. The Schwab US Dividend Equity ETF, tracking the Dow Jones U.S. Dividend 100 Index, posted a 244 percent total return and 13 percent annualized gain at a 0.06 percent expense ratio, with Home Depot, UnitedHealth, Coca-Cola and PepsiCo among its largest positions.
Swiss-listed dividend ETFs offer lower-cost alternatives but with more concentrated portfolios. The UBS MSCI Swiss Dividend ETF CHF acc, launched in March 2025, carries a 0.12 percent expense ratio and tracks the MSCI Switzerland IMI High Dividend Yield Index, focusing on companies with high, sustainable dividend yields and other quality characteristics. It holds 17 companies, with the five largest — Roche (15.05 percent weight, 2.83 percent yield), Zurich Insurance (14.56 percent, 5.09 percent), Novartis (14.55 percent, 3.27 percent), Swiss Re (14.55 percent, 4.59 percent) and Nestlé (13.87 percent, 3.99 percent) — accounting for just over 72 percent of the portfolio. Other holdings include Helvetia Baloise and Allreal, each offering a dividend yield of around 3.6 percent. A 12-month return of 11.25 percent was reported as of end-August.
The BlackRock iShares Swiss Dividend ETF, launched in April 2014, tracks the SPI Select Dividend 20 and has returned 9.04 percent annualized since inception at a 0.15 percent expense ratio. Its top five holdings are nearly identical to the UBS fund, with Swiss Life added at a 6 percent weight and a 4.0 percent dividend yield. Unlike the UBS fund, the BlackRock product distributes dividends rather than accumulating them.
A key distinction between these products is whether dividends are distributed or reinvested. Distributing funds provide regular income but forgo the compounding effect if payouts are spent rather than reinvested. Nannette Hechler-Fayd'herbe, chief investment officer at Lombard Odier, told cash that dividends are "one of the safest ways to build capital — provided they are consistently reinvested rather than used as a source of income for consumption."
Dividend ETFs carry the same risks as other equity investments, including volatility driven by company-specific news, macroeconomic shifts and geopolitical developments. They nonetheless remain a viable component of a long-term portfolio.
