5 High-Yielding ETFs to Buy and Hold Forever

In a market dominated by AI hype cycles and rapid-fire momentum trades, there’s something comforting and effective about sticking to time-tested principles. For long-term investors who prioritize steady income, low volatility, and compounding growth, diverse and broad-based blue-chip dividend ETFs continue to offer a compelling way to build durable wealth.

They provide diversified exposure, consistent payouts, and the peace of mind that comes with a passive, rules-based strategy.

Legendary investors, such as Warren Buffett, have long advocated the power of dividend-paying companies, particularly those with durable competitive advantages and a history of returning capital to shareholders. For those seeking to emulate Buffett’s conservative, long-term investment approach, dividend-focused ETFs offer a convenient and low-cost means to capture that philosophy without the need to select individual stocks.

This is especially true for investors who are not skilled in fundamental research, but rather are looking to invest for the long term and gain passive exposure to the best of the U.S. market. For new investors, this approach is precisely what Buffett has publicly recommended. 

Below, we examine five top dividend ETFs that balance growth, income, and defensive characteristics. These ETFs can serve as core holdings for traditional long-term portfolios and are particularly well-suited for investors seeking to weather uncertain markets while steadily compounding their capital.

Vanguard S&P 500 ETF Hits New All-Time Highs

If you’re seeking simplicity, low cost, and exposure to the backbone of the U.S. economy, the Vanguard S&P 500 ETF (NYSEARCA: VOO) is a quintessential pick. This fund tracks the S&P 500 Index, offering access to 500 of the largest U.S. companies, many of which are proven dividend payers.

VOO carries a razor-thin expense ratio of just 0.03% and a dividend yield of 1.23%. While the dividend yield is modest, it’s backed by some of the world's most stable and profitable businesses. From technology giants like Apple, NVIDIA, Meta, Amazon, and Microsoft, to companies such as Johnson & Johnson, Procter & Gamble, and Berkshire Hathaway. These companies offer both capital appreciation and a steady dividend stream.

The ETF provides investors with exposure to all sectors of the economy. It is comprised of 31% technology, 14% financials, 11% consumer discretionary, and nearly 10% in healthcare and communications.

Year-to-date, VOO is up over 5%, and since its inception in 2010, it has returned more than 300%, not including dividends. With $680 billion in assets under management and a diversified portfolio spanning all major sectors, VOO serves as a reliable anchor for long-term investors seeking to track the market with minimal effort and cost.

Schwab U.S. Dividend Equity ETF Blending Strong Historical Growth and Dividends

When it comes to dividend growth, the Schwab U.S. Dividend Equity ETF (NYSEARCA: SCHD) has built an impressive reputation. Tracking the Dow Jones U.S. Dividend 100 Index, SCHD focuses on companies with a decade or more of consistent dividend payments and strong balance sheets.

The ETF has a dividend yield of nearly 4%, a Net Asset Value of $26.41 per share, and total net assets of almost $69 billion.

This disciplined approach has paid off. Since its launch in 2011, SCHD has delivered an average annual return of 12.22%. Geographically, the fund is almost exclusively weighted in the U.S., with 96% exposure.

From a sector standpoint, it’s more diversified. 19% in energy, 18.5% in consumer staples, 15.5% in health care, 11.4% technology, and 10.4% in consumer discretionary. 

The fund’s expense ratio is a modest 0.06%, and it maintains a strong track record of dividend growth, making it a favorite among both conservative and dividend growth-minded investors.

If you’re looking for a blend of income, historical growth, and quality, SCHD could potentially belong in your core portfolio.

SPDR S&P Dividend ETF: Focusing on Dividend Leaders

The SPDR S&P Dividend ETF (NYSEARCA: SDY) is built around a simple but powerful strategy: invest in companies that have increased their dividends for at least 25 consecutive years. That filter ensures that only high-quality, shareholder-friendly businesses make the cut.

SDY offers a 2.63% dividend yield and comprises 133 holdings, with top names including Chevron, Realty Income, Microchip Technology, Target, and Texas Instruments. Since its inception on November 8, 2005, the fund has returned an annualized 8.67%, compared to the benchmark's 8.99%. 

SDY The fund has 96% U.S. exposure and a well-balanced allocation across industrials, utilities, consumer staples, energy, technology, and financials, providing both defensive and upside potential.

With a respectable 2.5% YTD return, not including dividends,  SDY combines the best of both worlds: stability through dividend consistency and growth via price appreciation. For long-term investors seeking reliable income and exposure to blue-chip companies, this ETF ticks all the right boxes.

Utilities Select Sector SPDR Fund: Defensive Approach with Steady Income 

The Utilities Select Sector SPDR FUND (NYSEARCA: XLU) doesn’t often make headlines, but that’s precisely why it appeals to conservative investors. Known for its defensive characteristics and dependable cash flows, utilities tend to hold up well during periods of volatility, recession risk, and even rising interest rates.

The Utilities Select Sector SPDR Fund holds a basket of leading electric, multi-utility, and gas utility companies. Its current dividend yield sits at 2.8%, and it boasts an expense ratio of just 0.08%. Top holdings include NextEra Energy, Constellation Energy, and Southern Company.

In 2025, XLU has established itself as a leading sector, gaining over 7.4% YTD, thanks in part to rising demand for energy infrastructure, particularly as AI-driven data centers expand power consumption. Nuclear energy and renewables are also becoming more central to the growth narrative.

For investors seeking stable, sector-specific income with defensive characteristics, XLU is a worthy candidate.

JPMorgan Equity Premium Income ETF: Low Volatility and High Yields

If income is your top priority, the JPMorgan Equity Premium Income ETF (NYSEARCA: JEPI) is hard to ignore. This fund has carved out a niche with its high-yield strategy, currently delivering a dividend yield north of 10%. How does it do that? Through a covered call approach that generates income by selling options on low-volatility stocks.

The fund has broad-based exposure, covering various sectors in nearly equal proportions: technology, financials, industrials, healthcare, and consumer discretionary, which comprise its five most heavily weighted sectors.

JEPI’s portfolio leans toward large-cap, value-oriented names with stable fundamentals, and its options overlay helps dampen volatility. The fund’s total return YTD is around 0.17%. Since its inception, the annualized return has been 11.37%.

With an expense ratio of 0.35%, JEPI is slightly more expensive than traditional ETFs; however, this cost can be potentially justified by the fund’s premium income strategy. For retirees or income-focused investors seeking a steady paycheck, JEPI offers a unique yield and downside protection combination.

A Strategy That Withstands the Test of Time

While the spotlight continues to shine on growth stocks and speculative plays, dividend ETFs remain a steadfast and rational choice for long-term investors. The five ETFs covered, VOO, XLU, SDY, JEPI, and SCHD, offer a spectrum of strategies, from broad market exposure to high-yield income and sector-specific plays.

In a world of uncertainty, surrounded by geopolitical tensions and monetary policy, including interest rate decisions and market fluctuations, dividend ETFs can stabilize a diversified portfolio. 

Whether your goal is to generate retirement income, build long-term wealth, or simply sleep better at night, these ETFs could provide the structure and discipline to help you stay the course.

Much like Buffett’s philosophy of investing in great businesses with enduring moats and shareholder-friendly policies, these ETFs offer an easy-to-execute strategy for those looking to build and preserve wealth over decades, not days.

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