21H·

Dividend ETFs to choose from

Dear gq community,

I’ll have some funds available this week that I’d like to invest in a dividend ETF.

Whenever this topic comes up, the $TDIV (-0.94%) is mentioned.

However, I’ve also identified two other ETFs that I’d like to put up for discussion, and I’d love to hear your pros and cons here.

The two additional dividend ETFs are, first, the $EQQQ (+2.71%) and, secondly, the $VHYL (-0.08%)

Here are a few figures:

Price performance

YTD

$TDIV (-0.94%) 11.98%

$EQQQ (+2.71%) 19.03%

$VHYL (-0.08%) 14.52%

1 year

$TDIV (-0.94%) 27.83%

$EQQQ (+2.71%) 35.54%

$VHYL (-0.08%) 26.92%

Dividend

Current

$TDIV 3.14%

$EQQQ 0.17%

$VHYL 2.36%

1 year

$TDIV (-0.94%) 3.90%

$EQQQ (+2.71%) 0.23%

$VHYL (-0.08%) 3.03%

My assessment is therefore as follows:

VanEck offers the highest dividend, but currently lags slightly behind Vanguard in the charts. In the chart, Invesco is far ahead of both in terms of YTD and 1-year performance. However, the dividend there is very low.

However, if you balance the dividend against the price gains, you would still have to choose the Invesco $EQQQ (+2.71%) .

I’d really appreciate your opinions, tips, and food for thought.

Your Hase🐰

@Dividendenopi
@Epi
@Multibagger
@Tenbagger2024
@Raketentoni

and, of course, everyone else who’s interested ♥️🥕

36 Comments

Raketentoni@Raketentoni

20H

Hey @TradingHase,

You’ve dug up some interesting figures for your spare change and broken them down very clearly. But let’s take a hard look at the data—and especially your final conclusion—because you’re mixing apples and oranges here.

Here’s the reality check for your decision-making:

**1. The elephant in the room: EQQQ is NOT a dividend ETF**
Right at the start, you write that your capital is supposed to flow into a “dividend ETF.” If that’s your real, strategic goal (regular cash flow), then the **Invesco EQQQ** has absolutely no place in this specific selection.

* The EQQQ tracks the Nasdaq-100. That is the ultimate U.S. tech growth engine, but not an income instrument.

* Your own data proves this mercilessly: The current dividend is a paltry 0.17%.

* Your conclusion to choose the EQQQ if one “offsets the dividend with capital gains” is, from a so-called “total return” perspective, entirely correct. However, this undermines your own goal of a dividend investment, as defined in the first sentence.

**2. The Real Showdown: TDIV vs. VHYL**

If we remove the tech outlier EQQQ, we’re left with the classic showdown between the dividend heavyweights:

* **VanEck ($TDIV):** As your figures correctly show, it delivers the highest dividend yield (currently 3.14% or 3.90% over 1 year). The TDIV applies very strict filters for dividend quality and sustainability, but focuses exclusively on established industrialized countries (developed markets).

* **Vanguard ($VHYL):** This is the global, stoic sledgehammer. It offers slightly lower dividends (currently 2.36% according to your data), but it also includes emerging markets and is extremely broadly diversified across the globe. It often doesn’t perform as dynamically as the TDIV, but it’s a massive rock in the storm.

**3. The Topic of Diversification**

* If you choose the **EQQQ**, you’ll have extreme concentration in the U.S. tech sector. This brings massive price gains in bull markets, but also brutal downward volatility when the tech sector takes a hit.

* In contrast, the **VHYL** offers you the ultimate global diversification in a single product.

* The **TDIV** is excellent for pure cash flow, but excludes pure growth stocks (since these often don’t pay high dividends).

**My tip and food for thought for you:**

Before buying, you need to make a cold, hard decision about what the *purpose* of this position in your portfolio should be:

1. **Do you want passive income and strong, reliable cash flow?** Then go with the **TDIV** for maximum returns or the **VHYL** for maximum global diversification.

2. **Do you want maximum capital growth (total return)?** Then go with **EQQQ** without hesitation. But then say goodbye to the idea that this is a “dividend investment.”

Choose the strategy, not just the past return figures!

Best regards!

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TradingHase@TradingHase

20H

@Raketentoni Thanks so much for breaking it down. 👍🏼 I selected those three ETFs on Finanzfluss using the "Dividend ETFs" filter. When I wrote down the dividend figures, I was actually a bit surprised by the amounts.
You’ve raised a very important point here for me and Spiel.
So the EQQQ is out for me, since I’m targeting dividends and I’m already invested in tech through individual stocks.
As for the other two, I find the respective approaches you outline so sharply interesting.
They might both find their way into my portfolio.

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Raketentoni@Raketentoni

20H

@TradingHase I’ve added the $TDIV and the $FYEQ to my portfolio for diversification. This way, I also have quality assets from emerging markets with a good overall return in my portfolio. The Tdiv has a 60% allocation to Europe if you add up all the countries.

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TradingHase@TradingHase

19H

@Raketentoni That’s an interesting idea, too. Given the TDIV’s heavy exposure to Europe, I could remove the two STOXX components and split the portfolio. I haven’t held any emerging markets for quite some time now.

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erbsinator@erbsinator

@Raketentoni I have the $HDEM instead of the $FYEQ, combined with the $TDIV

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Raketentoni@Raketentoni

@erbsinator
We have two emerging markets (EM) ETFs here that, at first glance, seem to be after the same thing (dividends from emerging markets), but operate in completely different ways behind the scenes. To get straight to the point: the Invesco ETF is severely lacking in fundamental quality.

Let’s take a hard look at both ETFs:

### 1. The Invesco FTSE EM High Div. Low Vol. (The Yield Trap)

This ETF uses an extremely blunt filter. It simply picks out the stocks from emerging markets with the historically highest dividend yield (“High Div”) and then filters them based on the lowest price volatility in the past (“Low Volatility”).

* **The problem:** An extremely high dividend yield usually results from the stock price having plummeted massively beforehand. So here, you’re systematically buying companies that are currently being punished by the market (classic value traps).

* **The missing filter:** The Invesco ETF **does not** ask why. It does not check whether the operating margin is sound, whether revenue growth is intact, or whether the dividend is even covered by genuine free cash flow. It simply buys blindly into the highest-looking yield. And in the worst-case scenario, “low volatility” means only that the stock doesn’t fluctuate wildly, but instead falls a little further each day in a completely stoic and unflappable manner.

### 2. The Fidelity EM Quality Income (FYEQ) (The Scalpel)

Here, the word “Quality” isn’t just marketing—it’s a rigorous, fundamental screening mechanism. Before this ETF invests a single cent, companies must clear tough financial hurdles.

* **The Cash Machine Test:** The FYEQ looks deep into the balance sheets. It filters for consistent margins, solid free cash flow, and a healthy debt structure.

* **Sustainability over greed:** Only once it’s proven that the company earns real, hard cash and the dividend isn’t paid out of assets or new debt (pseudo-dividend) does the stock make it into the portfolio.

### The Brutal Truth for Your Portfolio
If you buy the Invesco fund, you’re adding a basket full of potential turnaround candidates to your portfolio—companies that currently (still) pay high dividends but whose underlying strength is often crumbling.
If you want to build a stoic, indestructible dividend foundation where payouts are secure in the long term, you absolutely must look at the fundamental numbers. And that’s exactly the tough job the FYEQ does for you. In the dangerous emerging markets, it separates the real cash cows from the pure story stocks with no substance!

Best regards!
Raketentoni

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erbsinator@erbsinator

@Raketentoni I think I'll have another chat with my trusted AI. On second thought, the FYEQ might actually fit better into the overall concept.

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Novius@Novius

@Raketentoni Thanks for another excellent analysis. I’d be interested to hear your thoughts on a comparison between $FYEQ and $IEEM

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TradingHase@TradingHase

@Novius At first glance, I’d think the dividend payout is the key issue here 🤷🏼‍♂️

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Novius@Novius

@TradingHase Yes, probably. That said, "your" dividend strategy is currently yielding a dividend return of around 1.5%.

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Raketentoni@Raketentoni

@Novius Hey @Novius!

I’m really glad the analyses are helping you! The question of how it compares to the $IEEM is a classic one, because it pits two completely different investment philosophies against each other: mindless market breadth vs. strict quality selection.

Let’s lay both contenders out on the dissection table and take a cold, hard look:

1. The iShares MSCI Emerging Markets ($IEEM) – The massive oil tanker
The $IEEM is the absolute standard index tracker. It simply buys over 1,300 companies from emerging markets based solely on market capitalization. If a company is big enough, it gets in—no matter what the balance sheet looks like.

The problem: You’re taking on massive concentration risks here. State-owned conglomerates from China or highly indebted commodity giants automatically end up at the top of the pot because they have enormous market capitalization.
The dividend: While the IEEM does pay out (distributing), it is not a dividend or income ETF. The yield usually hovers somewhere in the meager range of 2.0% to 2.5% because it also contains hundreds of tech growth stocks that don’t pay out a single cent.

2. The Fidelity EM Quality Income ($FYEQ) – Our surgical scalpel

The FYEQ throws blunt market capitalization overboard and mercilessly runs emerging markets through a fine-mesh quality sieve.
The filter: Before a stock is included here, it is screened for stable operating margins, genuine profits, healthy debt levels, and, above all, sustainably covered free cash flow. Unprofitable companies are immediately weeded out.

The result: Although it contains significantly fewer stocks, it provides you with a focused selection of true cash machines. As a result, the dividend yield is historically much more attractive and stable than that of the IEEM.

The verdict is crystal clear:
If you simply want to cover the entire EM world and aren’t bothered by meager payouts or unprofitable state-owned enterprises in your portfolio, go with the IEEM.

But for those seeking a solid income foundation where dividends must be earned through genuine operational substance, there is absolutely no way around the FYEQ. It filters out the junk from emerging markets before it reaches your portfolio.

For a true quality dividend strategy, the FYEQ wins this duel in the first round by knockout! 🥊

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View all 5 further answers

David@Redfox77

20H

Strategically speaking, you can't really compare TDIV to the Nasdaq. What are you hoping to achieve with this new ETF? How do you plan to incorporate it into your current portfolio?

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TradingHase@TradingHase

20H

@Redfox77 I’d like to add an ETF to my portfolio. Since the tdiv is frequently mentioned, I’ve selected these two comparable ETFs.

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David@Redfox77

20H

@TradingHase See the reply from @Raketentoni. You need to decide on a strategy first.

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TradingHase@TradingHase

20H

@Redfox77 No sooner said than done 😉

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Basti92@BavarianLion

20H

I have both the $VHYL and the $TDIV in my portfolio! If it were my portfolio, I’d split my investment 50/50! Because both have their pros and cons.
But that’s just my personal opinion—not investment advice 🙂

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TradingHase@TradingHase

19H

@BavarianLion Thanks for your input. The additional reference to EM from @Raketentoni is also very interesting.

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Solitair@Solitair

19H

The new $LDGL is also very popular, although if I had to choose, I’d go with the $TDIV. Maybe the $WINC as well, if you’re looking for an even higher dividend yield.
But why would a young person even choose a dividend ETF? That’s really more for old fogies like me.

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Basti92@BavarianLion

18H

@Solitair I agree with you in principle! But there’s one thing I learned pretty quickly on the stock market: you should never underestimate the psychological factor! It gives me a huge boost when a thousand-euro dividend comes in out of the blue 🔥 Especially in tough times, that can be extremely motivating!

Also, I have to say that the $TDIV has also generated a relatively good return over the last 10 years (yes, I know that doesn’t say anything about the future 😉)

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TradingHase@TradingHase

11H

@Solitair Well, "young" is always a bit of a stretch. At 50+, I'm closer to retirement than to starting my career. 😂

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Solitair@Solitair

@TradingHase 😁 Oops. I got that mixed up—we're actually about the same age. For some reason, I had it in the back of my mind that you were an apprentice.

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TradingHase@TradingHase

@Solitair Nah, that's probably @Klein-Anleger 😉

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NichtRelevant@NichtRelevant

18H

Thanks for the interesting post. I think @Raketentoni has done a good job of covering the three ETFs in its response.

Both traditional dividend ETFs—namely the $TDIV and the $VHYL —are solid choices; whichever one you choose, you can’t go wrong. The $EQQQ isn’t bad either, but by nature it’s not a dividend ETF—it’s focused on the U.S. tech sector. If you want to invest in tech while also targeting high yields, you could theoretically combine one of the two dividend ETFs with an $JEPQ, which delivers high monthly distributions via a covered call structure. Of course, covered call structures always carry a significant (price) risk.

Personally, I combine the conservative $TDIV with the riskier $WINC to boost my payouts.

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Raketentoni@Raketentoni

13H

@NichtRelevant Well, the " $WINC " has the downside that it fully absorbs market losses, and when the market really takes off, the upside is capped by the option/call strategy. The payout has to come from somewhere 😬 As always, everything has its pros and cons 🤷

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NichtRelevant@NichtRelevant

11H

@Raketentoni That's right. The $WINC is a CC product, similar to the $JEPQ. It offers high distributions (quarterly for WINC), but comes with a certain downside risk and limited upside potential.

I’ve invested a fair amount in this stock, but logically, I wouldn’t put all my money into it. 🙂

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Raketentoni@Raketentoni

11H

@NichtRelevant At least you get it. I just always find it funny when I read some people asking why you don't just put everything in there—it yields a 10% return, after all 😬

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Solitair@Solitair

@NichtRelevant You might also want to consider the $ASWM. It allocates only 50% of its portfolio to CC.

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Tenbagger2024@Tenbagger2024

21H

Here, I will clearly state @Dividendenopi

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Dividendenopi👴@Dividendenopi

21H

@Tenbagger2024 Thank you, but there are people who are much more knowledgeable about ETFs

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Tenbagger2024@Tenbagger2024

20H

@Tenbagger2024 @Dividendenopi The key question here is: what matters most to you? Performance or dividends? If it’s dividends, Van Eck is clearly the better choice. But when it comes to dividends, it might also be worth taking a look at the approach outlined at @Dividendenopi

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Italiener@Italiener

$LDGL 😁🤟🏻

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