Dividend exchange-traded funds (ETFs) combine the steady passive income stream of dividend stocks with the ease of a fund managed by a third party provider, giving investors the best of two different worlds. For investors interested in dividend-paying companies, targeting individual names can sometimes necessitate keeping an eye on dividend yield, payout ratio, and other metrics which indicate the long-term viability of continued dividend payments. ETFs focused on dividend companies, on the other hand, can take a lot of this work out of the picture.
Investors are drawn to ETFs in part as well because of their low cost. While this is true for many ETFs, it is not always the case, and indeed some of the leading dividend funds have higher expense ratios than many other exchange-traded vehicles. Nonetheless, the potential passive income these funds provide may far outweigh the relatively high fees they carry. Here are three red-hot dividend (or dividend-like) ETFs to consider for 2025.
