What are high dividend ETFs?

Why invest in high dividend ETFs?  

Investing in high dividend ETFs offers investors several benefits:

• They can increase your cash flow by potentially providing a steady stream of income. 
• The extra income is generally paid quarterly.
• If you don’t need the income, you can reinvest the dividends into your existing holdings.
• If you are retired, high dividend ETFs could form part of an income-producing portfolio.

What makes an ETF a high dividend ETF?  

A yield greater than 4% could be considered a high dividend ETF as this is generally a premium to the FTSE All Share yield, which as of September 2025 stood at 3.4%. The yield on global shares (MSCI World index) is lower, around 1.5%.

Dividend yields quoted on a fund’s factsheet are backward looking, meaning that they calculate the income paid out over the past 12 months as a percentage of the current price of the ETF. While a good guide for the yield of a portfolio, future dividends may vary, and a rising price of an ETF can reduce its yield if there is not an equal increase in dividends paid.

Some high dividend ETFs focus on the high yielding companies globally or in a particular market. Others focus more on dividend growth potential.

Other income-focused equity ETFs focus on dividend track records – targeting companies which have consistently increased their annual payouts over a certain time frame. While yields here may be lower, the reliability of the dividends may be greater, as these companies have built a reputation for prioritising increasing payouts to shareholders.

Best High Dividend ETFs  

Updated by Kyle Caldwell in September 2025

Vanguard FTSE All-World High Dividend Yield ETF $Dis GBP (LSE:VHYL) is one high dividend ETF that features in ii’s Super 60 list of fund ideas. It yields 2.9% by owning large and mid-sized global companies that have higher-than-average dividend yields. Risk is spread across 2,000 stocks and the yearly ongoing charges figure (OCF) is 0.29%.

SPDR® S&P Global Dividend Aristocrats ETF (LSE:GLDV) owns global shares that have maintained or increased their dividend annually for at least 10 years. It yields 4% and owns around 100 companies, charging annual fees of 0.45%.

iShares Core FTSE 100 ETF GBP Dist (LSE:ISF) tracks the FTSE 100 index, good for UK income exposure. The UK offers some of the highest dividend yields among developed markets, given the bias to strong dividend paying sectors including energy and financials. iShares Core FTSE 100 ETF yields 3.3%, with distributions to investors every three months. It costs 0.07% in annual fees.

iShares UK Dividend ETF GBP Dist (LSE:IUKD) has a higher yield of 5.2% on offer. This ETF owns 50 stocks with leading dividend yields from UK listed companies. Its cost is 0.4% a year.

WisdomTree Europe Equity Income UCIT ETF GBP (LSE:EEI) offers European exposure, and has a yield of 5.6%. It invests in high yielding European companies.

Invesco EURO STOXX High Dividend Low Volatility ETF, is another for European exposure, with a yield of 5.6%. It invests in 50 high yield European companies that are also deemed to have low volatility.

For investors prepared to take on greater risk, there are high dividend ETF options for emerging market economies.

iShares EM Dividend ETF USD Dist GBP (LSE:SEDY) has a yield 7.3% yield. It owns 100 emerging markets companies with the highest dividend yields. The yearly charge is 0.65%.

iShares Asia Pacific Dividend ETF USD Dist GBP (LSE:IAPD) has a yield of 4.6%, offering exposure to Asia. It invests in 50 stocks with leading dividend yields from Asia Pacific countries. Its yearly charge is 0.59%.