The Best Dividend ETF for Right Now—and 2026

By Ian Salisbury

Dec 12, 2025

The Schwab US Dividend Equity ETF has lagged far behind the market and the Vanguard Dividend Appreciation ETF this year. (Justin Sullivan/Getty Images)

Key Points

About This Summary

• The stock market has returned more than 18% this year. Many dividend funds haven’t kept up.
• The Vanguard Dividend Appreciation ETF is up 16% this year, while the Schwab US Dividend Equity ETF returned 5.3%.
• Vanguard’s fund focuses on dividend growth, so it invests heavily in tech, while Schwab’s targets companies with strong fundamentals in areas such as consumer staples and energy.

America has a K-shaped economy. The performance of dividend funds is similar.

The stock market has returned more than 18% so far this year, including dividends. The fact that the rally is led by fast-growing tech companies makes it hard for dividend stocks, dedicated to handing cash back to investors, to keep up.

But some have done better than others. Take a look at the $120 billion Vanguard Dividend Appreciation 

VIG  ETF, the market’s largest dividend exchange-traded fund. It’s up 16% this year. By contrast, one of its main rivals, the $72 billion Schwab US Dividend EquitySCHD ETF, has returned just 5.3%.

What gives? The two funds’ approaches to dividends aren’t so different from the current socioeconomic split between two Americas.

One group of people in the U.S. is thriving, with wealth rising like the upper arm of a letter K. It is benefiting from the extraordinary excitement around artificial intelligence that is lifting the prices of tech stocks and swelling the bank accounts of those that own them.

Another segment of U.S. represents the K’s lower arm. The majority of consumers are struggling with tepid wage growth and stubborn inflation.

The realm of dividend funds shows the same kind of divergence. Vanguard Dividend Appreciation focuses on companies that grow their dividends, giving it a tech-first portfolio, with top holdings that include Broadcom, Microsoft, and Apple. 

Schwab U.S. Dividend Equity ETF takes a more traditional approach, targeting stocks with strong fundamentals and sustainable payouts. Its top holdings include companies like Coca-Cola, ConocoPhillips 

COP, and ChevronCVX. It is heavily invested in consumer staples and energy, two sectors that have badly lagged behind the market in 2025.

Schwab U.S. Dividend Equity has some strong points. It yields 3.8%, compared with 1.6% for the Vanguard fund, an important consideration for dividend investors who want income. And its portfolio is arguably undervalued as a result of the market’s obsession with growth. Shares in its portfolio trade at an average of 14 times forward earnings, compared with 21 times for the Vanguard fund.

That means that if the market really is in an artificial-intelligence bubble, and that bubble pops. the ETFs’ fortunes could quickly reverse. The tech stocks that have boosted the Vanguard fund would slide, while companies like Coca-Cola could rise as investors reallocate their cash.

That said, investors in Schwab U.S. Dividend Equity will have to be patient. With stubborn inflation and a weakening job market, consumer stocks don’t seem likely to rebound soon.

And the picture for energy stocks is even gloomier. Oil prices tumbled about 20% in 2025. With oil companies still pumping at a breakneck rate, they look set to fall further in 2026.

The upshot is that as long as the market rally giving the economy its K shape continues, these funds will remain the dividend world’s haves and have-nots.

Looking for High-Yield Dividend Stocks ? Citizens JMP Suggests 2 Names — One Offers a Massive 13% Yield

Sat, December 13, 2025

As we head into 2026, it’s only natural to want to set up the best possible portfolio for the new year. The key here is returns – we’ve seen bullish markets for several years now, and investors want to keep up that momentum. Dividend stocks can make a clear contribution.

Among the higher-yield corners of the market, business development companies (BDCs) stand out. These firms provide financing to small- and medium-sized businesses that often fall outside the traditional banking system, and like REITs, they benefit from favourable tax treatment when they distribute a large share of earnings to shareholders. That leads to high and usually reliable dividends.

Covering the BDC space for Citizens JMP, analyst Brian McKenna notes that despite recent underperformance, the fundamentals remain intact.

“Both the Alts and BDCs have underperformed over the past several months, although as we have written about at length, underlying fundamentals remain generally healthy for many (vs. perceptions across the marketplace today),” McKenna said. “We think the recent underperformance across the industry is largely unwarranted, specifically as the broader markets continue to trade at/near all-time highs, and we see (yet again) another compelling longer-term buying opportunity in these stocks.”

For investors seeking out high-yield dividend payers, this is exactly what is needed: an attractive point of entry and strong dividend.

Trinity Capital (TRIN)

The first company on our list, Trinity Capital, is an alternative asset manager that is structured for business purposes as an internally managed BDC. The company aims to provide its client firms with access to the credit market, and its investors with stable and consistent returns. Trinity invests its capital in a wide range of target firms, across several categories: tech, equipment, life sciences, sponsor finance, and asset-based lending. Since its founding in 2008, Trinity has poured some $5.1 billion into its investments. The company is based in Phoenix and operates in the US and Europe.

Trinity currently has $2.6 billion in assets under management, and boasts a market cap of $1.15 billion. The company makes careful vetting of its investment targets, keeping in mind its constant goal of maintaining a sound return for investors. This is usually returned via dividend distributions, and as of September this year Trinity has returned a cumulative $411 million through those payments.

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• How Trinity’s Seventh Straight Dividend Raise Will Impact Trinity Industries (TRN) InvestorsSimply Wall St Sun, December 7, 2025
• • Trinity Industries recently increased its quarterly dividend to US$0.31 per share, its seventh consecutive annual raise and the 247th straight quarterly payout, with the latest dividend paid on January 30, 2026 to shareholders of record on January 15, 2026.This extended record of dividend growth highlights Trinity’s emphasis on consistent shareholder returns and reinforces its reputation for disciplined capital allocation in the rail sector. We’ll now explore how this latest dividend increase shapes Trinity’s investment narrative, particularly its balance between income stability and future growth.
• Trinity Industries Investment Narrative Recap. To own Trinity Industries, you have to believe in the long-term need for North American railcar leasing and manufacturing, supported by stable demand for freight-by-rail. The latest US$0.31 dividend increase reinforces Trinity’s income appeal, but does not materially change the near term picture, where the key catalyst remains a healthier railcar order environment and the main risk is that cyclical end markets and delayed customer capex continue to weigh on volumes and cash. The dividend hike follows Trinity’s October 2025 move to tighten and raise its full year 2025 EPS guidance to US$1.55 to US$1.70, which helped frame the payout within recently updated earnings expectations. Together, these announcements point to a management team signalling confidence in the business while still operating against a backdrop of softer recent sales, high leverage and interest costs that are not comfortably covered by earnings. Yet behind the steady dividend record, investors should also be aware of Trinity’s high leverage and relatively weak interest coverage…
• Read the full narrative on Trinity Industries (it’s free!)
• Trinity Industries’ narrative projects $2.6 billion revenue and $207.4 million earnings by 2028. This requires 1.3% yearly revenue growth and about a $98.8 million earnings increase from $108.6 million today.
• Uncover how Trinity Industries’ forecasts yield a $25.50 fair value, a 8% downside to its current price.
• Exploring Other PerspectivesTRN Earnings & Revenue Growth as at Dec 2025The Simply Wall St Community’s two fair value estimates for Trinity span roughly US$16.32 to US$25.50, underlining how far apart individual views can be. Some of these investors focus on the risk that Trinity’s exposure to cyclical energy and agriculture demand could slow new railcar orders and weigh on longer term performance, so it is worth comparing several viewpoints before forming your own stance.
  • A great starting point for your Trinity Industries research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.
  • Our free Trinity Industries research report provides a comprehensive fundamental analysis summarized in a single visual – the Snowflake – making it easy to evaluate Trinity Industries’ overall financial health at a glance.

Blue Owl Technology Finance (OTF)

Next on our list, Blue Owl Technology Finance, is a large, tech-focused BDC that was formed to provide credit to tech-related firms. The company originates and makes loans and makes equity investments in its target firms, and aims mainly at enterprise software companies. Blue Owl Tech Finance is externally managed by an affiliate of the larger Blue Owl Capital. This link to a larger asset manager gives the BDC access to solid backing.

The BDC focuses on US-based upper middle-market tech firms. Its investment strategy prioritizes senior secured or unsecured loans, subordinated loans or mezzanine loans, and also equity-related securities. Blue Owl Tech Finance aims to prioritize long-term credit performance for maximum returns. This includes setting a diversified portfolio and weighting it toward defensive industries that are non-cyclical.

Blue Owl Tech’s portfolio currently stands at $12.9 billion in fair value, with 77% of it being in first-lien senior secured loans. The portfolio features 97% floating-rate debt investments and 3% fixed-rate. Nearly three quarters (74%) is located in three US regions: West, South, Northeast. Systems software makes up 20% of the portfolio.

In its last reported financial quarter, 3Q25, Blue Owl Tech reported two key metrics: the company reported a GAAP net investment income of 28 cents per share and an adjusted net investment income of 32 cents per share. This quarter marked the company’s first full quarter as a publicly listed firm. Blue Owl Tech declared a dividend of 35 cents per share to be paid on January 15. In addition, the company has declared five special dividends of 5 cents each, with the next one scheduled for payment on January 7. The total dividend to be paid in January, 40 cents per common share, annualizes to $1.60 and gives a forward yield of 11%.

McKenna, in following this BDC, lays out a course that he sees it following, one that will lead to continued success.

“Given the strong trajectory of NII over the next year (i.e., NII per share will be growing vs. the 2H25 quarterly level, not declining), we think the company will be roughly earning the regular quarterly dividend ($0.35 per share) exiting 2026, with even greater dividend coverage beyond that as leverage and the size of investment portfolio inevitably normalize to the longer-term targets, a clear outlier within the publicly-traded BDC sector. We also highlight that the company has a healthy track record of delivering unrealized/realized gains across the portfolio (specifically tied to equity investments), so any incremental GAAP earnings above and beyond NII will be accretive to GAAP NI ROEs, as well as NAV,” McKenna noted.

Summing up, the Citizens analyst says of Blue Owl Tech: “Bottom line, as leverage and the size of the investment portfolio normalize over time, we anticipate the company will generate ~10%+ ROEs through the cycle (both on an NII and GAAP net income basis), potentially even above that depending on the level of appreciation/upside that occurs within the equity portfolio, which we think will be the biggest driver of OTF’s valuation multiple over time… We believe OTF is an excellent way to gain exposure to the asset class, specifically some of the largest and most innovative companies in the private ecosystem.”

Quantifying his stance on OTF, McKenna rates the stock as Outperform (i.e., Buy), with a $17 price target that suggests an upside of 20% by this time next year. The one-year return can hit 31% when the dividend yield is added in.

Overall, Blue Owl Tech’s Moderate Buy consensus rating is supported by 9 analyst reviews that include 4 Buys and 5 Holds. The shares are priced at $14.21, and the $15.78 average price target implies a 12-month gain of 11%. (See OTF stock forecast)

Remember if you buy a tracker and can decide when to sell you will not lose any of your hard earned. As in the chart above, you may have to wait several years to be proved correct, better if there is a dividend, so you can add more shares without risking any more of your capital.

Lower risk but you have to old thru thick and thin, there will always be plenty of thin.

If you are still undecided, you could invest part of your portfolio for TR and part for dividends.

When not if, when the market falls you will be able to compare both strategies.

The Snowball has beaten the 2025 fcast and target, so it’s now history.

The Snowball, on all the known unknowns should at least better the year one 2026 target of 10k, especially as there is already a buffer built in for January.

Remember the Snowball doesn’t add any capital, so if you can add to your Snowball, even modestly you should be able to improve the yield in the table above, especially thanks to Mr. Market you can currently re-invest all dividends at above 7%, or pair trade with a blended yield of 7%.

Pair trading is best if you are not near to you retirement date as you have time to correct any unfavourable trading choices.

Also if you can only add a modest amount, compound interest takes several years before the big money is made, which should encourage you to start saving. Can you cut one coffee a day and save the cash ?

Your Snowball should be different from the blog Snowball as it should reflect on your risk profile, which depends mainly on how many years it is before you want to spend your hard earned. Join us on the journey, where there are bound to be many twists and turns as we journey thru the year.

Dividends can be more reliable than share prices as they’re driven by
the companies performance itself and not by the whim of investors.

As part of a total return / reinvestment strategy, this income could be
reinvested into income assets or back into the equity market
depending on the relative valuations.

The emotional benefits of dividend re-investment.
In fact, with this investment strategy you can actually welcome falling share prices.

Current income fcast for January £1,680

Current income fcast for first quarter £3,660.00

Do not scale to arrive at a figure for the year as the above figure includes some dividend washing using recent trading profits.

You fail by the month and not the year or 5 years as recommended by some market commentators.

House price growth may be slowing but offices and online shopping are driving growth in real estate investment.

(Image credit: Getty Images/Catherine Falls Commercial)

By Marc Shoffman

It’s been a mixed year for the housing market but the door is still open for investors to make money from bricks and mortar in 2026.

Slowing house price growth, higher taxes and extra rental regulations have made investing in property more tricky in recent months.

But experts claim there are still reasons to back real estate, especially with the prospect of interest rate cuts in the coming weeks.

Big themes for investors include the return-to-the-office and the rise of online shopping.

Daniel Austin, chief executive and co-founder at specialist property lender ASK Partners, said: “The 2025 Autumn Budget offered limited stimulus for the housing market and, persistent headwinds such as sticky inflation, higher for longer interest rates, elevated construction costs, and slow planning processes continue to impact development viability.

“But there are still reasons for cautious optimism. The UK economy is forecast to grow by 1.4% this year. This is expected to outperform the eurozone and should support investor confidence.

“The UK also remains an attractive destination for global capital, with ongoing interest from the Gulf, Southeast Asia and deepening UK United States investment links, particularly through the technology sector.”

Here are the emerging trends in real estate for 2026 and how to invest in them.

Prime offices

Many companies are reducing remote working and getting staff to be in the office more frequently.

Austin suggests businesses are competing for modern, energy efficient and amenity rich workplaces that support hybrid working.

He said: “Best-in-class offices in central London continue to achieve strong rents and stable yields.”

The rise of build-to-rent

The UK housing market continues to be hit by a lack of supply.

The government is pushing planning reforms through parliament to boost development but there are also fears that landlords could exit the market due to new rental regulations and higher taxes.

Build-to-rent – developments typically run by large institutional landlords – may fill that gap, providing an opportunity for investors. You may already have some exposure to this through your pension.

Austin said: “With so many smaller landlords exiting the sector due to increased costs and regulatory complexity, professionally managed rental formats are becoming more important. Build-to-rent and co-living are particularly well positioned to serve younger, mobile workers who seek affordability, connectivity and community. Mid-market suburban and commuter belt schemes may outperform prime central locations, especially in areas benefiting from new infrastructure such as the Lower Thames Crossing.”

Storage and logistics

Demand for storage and logistics is being driven by the growth of online retail as well as the growing adoption of artificial intelligence, cloud services and high-performance computing.

This means there is more demand for industrial sites to store goods for online deliveries and also hard drives to power cloud software.

Austin said: “Growing adoption of artificial intelligence, cloud services and high-performance computing is placing unprecedented pressure on power capacity and suitable land, making data centres an increasingly strategic real estate category.

“The combination of long-term contracted income, critical infrastructure status and limited supply of appropriate sites means this segment is likely to remain strong. Mixed-use industrial schemes that accommodate logistics, data infrastructure and urban services will offer particularly attractive, income-led opportunities in 2026.”

Hotels and hospitality

The transformation of under-utilised office buildings into hotels are creating new avenues for investors, according to Austin.

He said: “The asset class continues to appeal to private investors and family offices seeking income diversification and long-term value.”

Income producing operational real estate

Operational real estate, including healthcare, specialist care, education and supported living can provide stable and inflation-linked income streams.

Austin said: “Demographic shifts, including an ageing population and rising demand for specialist services, support the long-term resilience of these sectors.”

How to invest in real estate

Unless you are a property developer or landlord who can afford to build or manage one of these assets, one of the most common ways to gain exposure to real estate assets is through real estate investment trusts (REITS) or property funds.

Oli Creasey, head of property research at Quilter Cheviot, said: “The REITs own a portfolio of properties worth a certain value, and shares in the companies are traded on stock exchanges throughout the day.”

Most specialise in a particular sub-sector.

Creasey highlights Derwent London and GPE for development and ownership of London offices, while Big Yellow and Safestore are self-storage specialists.

Investors can get access to health care developments through Primary Health Properties and Target Healthcare, which owns senior living centres.

Meanwhile, Unite Group backs student accommodation, while Grainger does general residential rental.

For buyers not looking to specialise, Creasey says there are several funds that buy REITs but use them to create a more diverse portfolio including Columbia Threadneedle;s Property Growth and Income as well as TIME’s Property Long Income and Growth funds.

There are also funds that create a diverse portfolio around a thematic approach such as Schroder’s Global Cities fund which invests in REITs worldwide that own assets located in the top cities globally, while Gravis’s Digital Infrastructure fund invests in REITs that are aligned with the ongoing technology revolution.

Ben Yearsley, director of Fairview Investing, suggests a broad based fund or trust that then leaves the sector and stock decisions to the fund manager is better than trying to gain direct exposure.

His favoured option is the TR Property investment trust managed by Marcus Phayre-Mudge.

Yearsley said: “It has a mix of UK and European property shares.

“Valuations are cheap and no one is interested on the sector. In addition with no speculative development in the past decade there are shortages of good quality property in many areas.”

For a sustainable option, Daniel Bland, head of sustainable investment management at EQ Investors, suggests the Schroder BSC Social Impact Trust, which backs social housing.

Investors Hate This Market (and They’re Dumping This Great 9% Payer) by Michael Foster, Investment Strategist Today we’re going to talk about a subject that might seem a little outside the dividend plays we normally discuss. But as you’ll see, this topic – a big shift in how Americans feel – is the main reason why some of our favorite high-yielding closed-end funds (CEFs) are woefully underpriced, like one equity-focused 9%-yielder with an incredible track record. Let’s start with that unlikely topic: Happiness. It matters because, as we’ll see, how happy Americans are ties directly into investing behavior in very predictable ways.  Source: CEF Insider This chart shows the results of the General Social Survey, from the University of Chicago’s National Opinion Research Center. It’s one of the oldest studies of Americans’ views on different social, political and cultural issues. When asked “How happy are you?” the majority feel pretty happy. That’s been true since the survey started asking this question in 1972. But look at the yellow line, showing how many Americans are not happy. It reached a new high in 2022 and is stuck there. Similarly, the percentage who are “very happy” has fallen to a new low and is trending further down. If these trends continue, the percentage who say they’re unhappy will climb above those who are very happy for the first time in history. That’s a big psychological shift, and markets haven’t caught on to it yet. Consumers Get the Blues Now let’s get into why this trend is a financial risk. This chart is our first stop. Here we have two measures of consumer confidence, one from the University of Michigan (in green) and one from the OECD (in blue). As you can see, these tend to drop during recessions (the gray sections above) and rise after, which makes sense. There are exceptions, like in 1992 and in 2011, when consumer confidence cratered following the recessions that preceded them. Back then, consumers clearly worried that recent bad times would return. But we’re now five years out from the last recession, and consumer confidence is stuck below where it was even during the pandemic! In other words, people feel worse about the economy now than they did when they were literally in quarantine. That’s strange, and it demands a closer look because, at least economically, it makes no sense. Unemployment is much lower than it was during the pandemic and remains historically low. Incomes and wealth are rising, breaking trends that lasted two generations, as we’ve recently discussed. So we’re left with one conclusion: People are just more miserable than they used to be, and it’s causing them to respond more negatively to surveys than they used to. This makes sense, since the pandemic’s aftermath sent inflation soaring and AI has boosted worries about many things, including job loss. The Data Has Changed. Wall Street Hasn’t This all matters because people who make major economic decisions rely on data like this. I know because I spent over a decade consulting with hedge funds and investment banks on how to create just these sorts of studies. This ties into our income (and portfolio value) in two ways. First, a lot of survey-driven research is less reliable than it used to be – including the oft-cited CNN Fear & Greed Index.  Source: CNN.com For a while now, it’s been saying that investors are fearful. But if so, why have stocks climbed to near all-time highs? This index clearly needs adjusting, because what counts as “fear” is now a lower number than it used to be. As a result of this shift, negative attitudes are no longer useful indicators of when a selloff will start. Of course, this also means that when the market sells off because everyone’s worried that attitudes are souring, we contrarians get a chance to profit. Consider how the market tanked in 2022 because most investors expected a recession, but then no recession came. Or how tariff worries sent markets into freefall in April, but nothing major has happened since. Selling because the market is getting fearful doesn’t work anymore, but buying when the market has whipped itself into a frenzy does. ASG: The Poster Child for Our New Pessimistic Era  We see this playing out with CEFs, where discounts to net asset value (NAV) are deeper because risk-averse investors, who tend to be most interested in CEFs, pull back when sentiment sours. A broad drop in happiness, then, can make them more cautious, sending CEF discounts to deeper levels than the fundamentals justify. As a result, the Liberty All-Star Growth Fund (ASG) has seen its discount drop below 10% in 2025, far below the last decade’s average of a 2.2% discount. That’s despite the fact that ASG has earned a 10.2% annualized return in that time and yields 9% today. It’s a CEF Insider holding I talk about a lot because, despite the “growth” in its name, it pays us that 9% dividend (which does move around a bit, as it’s tied to the fund’s NAV). ASG also holds a nice mix of large- and mid-cap stocks. Top holdings range from Apple (AAPL) to New York State retailer Ollie’s Bargain Outlet Holdings (OLLI). Eventually, history suggests that CEF investors will realize we live in a new era where sentiment is lower than it used to be, simply because these are more pessimistic times. At that point, they’ll likely see that these discounts have gotten too wide and bid them up. If we buy ASG today, we’d be nicely positioned to beat them to the punch – and collect that rich dividend while we wait for this to happen.