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7 Dividend-Focused ETFs for a $2,000 Investment in 2025

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  Published in Stocks and Investing on Monday, December 15th 2025 at 4:27 GMT by The Motley Fool

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7 Dividend‑Focused ETFs to Put Your $2,000 to Work – A 2025 Guide

If you’re looking for a hands‑off way to grow income over the long haul, dividend‑focused ETFs are a natural fit. They give you instant diversification, a built‑in dividend stream, and the convenience of buying a single share on any major exchange. The Motley Fool’s December 15, 2025 article breaks down seven ETFs that, according to its authors, provide the best balance of yield, low cost, and stability for a “buy‑and‑hold” strategy. Below is a comprehensive walk‑through of each fund, the reasoning behind its selection, and how you can slot it into a simple $2,000 investment plan.

1. Schwab U.S. Dividend Equity ETF (SCHD)

• Expense Ratio: 0.06%
• Dividend Yield (2024): ~3.5%
• Top Holdings: Apple, Microsoft, Johnson & Johnson, Coca‑Cola, PepsiCo
• Why It’s Picked: SCHD pulls from the Dow Jones U.S. Dividend 100 Index, filtering out low‑quality dividends and focusing on companies with a history of sustainable payouts. Its ultra‑low expense ratio and strong track record make it a core holding for a buy‑and‑hold portfolio.
• Additional Info: The article links to the Schwab website where you can review the fund’s prospectus and latest fact sheet.

2. Vanguard Dividend Appreciation ETF (VIG)

• Expense Ratio: 0.06%
• Dividend Yield (2024): ~1.7%
• Top Holdings: UnitedHealth Group, Procter & Gamble, Home Depot, Johnson & Johnson, PepsiCo
• Why It’s Picked: VIG focuses on the S&P 500 Dividend Aristocrats—companies that have increased dividends for at least 20 consecutive years. It’s less about high current yield and more about long‑term growth of income.
• Additional Info: The link in the article goes straight to Vanguard’s page, which includes the fund’s 2024 performance summary and a screener for dividend growth.

3. Invesco S&P 500 High Dividend Low Volatility ETF (SPHD)

• Expense Ratio: 0.35%
• Dividend Yield (2024): ~4.8%
• Top Holdings: AbbVie, Verizon, Pfizer, AT&T, IBM
• Why It’s Picked: SPHD targets the top 50% of the S&P 500 by yield while filtering for low volatility. This is ideal for investors who want a higher yield without a proportional spike in risk.
• Additional Info: The article includes a link to Invesco’s analysis, which explains the low‑volatility screen and shows how SPHD historically outperformed a simple “high‑yield” index during market downturns.

4. iShares Select Dividend ETF (DVY)

• Expense Ratio: 0.39%
• Dividend Yield (2024): ~4.1%
• Top Holdings: ExxonMobil, AT&T, AbbVie, Pfizer, Chevron
• Why It’s Picked: DVY leans heavily into energy and utilities, sectors that have historically delivered stable dividends. Its expense ratio is higher than SCHD or VIG, but the yield and sector mix compensate for those costs.
• Additional Info: The link to the iShares page offers an interactive sector‑by‑sector breakdown and a comparison tool against the broader U.S. equity market.

5. SPDR S&P Dividend ETF (SDY)

• Expense Ratio: 0.15%
• Dividend Yield (2024): ~3.0%
• Top Holdings: AT&T, AbbVie, Johnson & Johnson, Procter & Gamble, Coca‑Cola
• Why It’s Picked: SDY tracks the S&P High Yield Dividend Aristocrats Index, offering a long list of dividend‑steady companies. Its moderate expense ratio keeps costs in check while delivering a respectable yield.
• Additional Info: The article links to the SPDR website for SDY, where you can download the 2024 fact sheet and view the fund’s quarterly holdings.

6. ProShares S&P 500 Dividend Aristocrats ETF (NOBL)

• Expense Ratio: 0.35%
• Dividend Yield (2024): ~1.8%
• Top Holdings: Procter & Gamble, Johnson & Johnson, Coca‑Cola, PepsiCo, 3M
• Why It’s Picked: NOBL is essentially the same “Aristocrats” universe as VIG but in a separate ETF. It’s handy for investors who prefer the ProShares brand or want to test a slightly different weighting scheme.
• Additional Info: The article links to a ProShares analysis that highlights how NOBL’s dividend growth has outpaced the broader market over the past decade.

7. WisdomTree U.S. High Dividend Fund (DHS)

• Expense Ratio: 0.10%
• Dividend Yield (2024): ~4.5%
• Top Holdings: ExxonMobil, Johnson & Johnson, AT&T, Verizon, Pfizer
• Why It’s Picked: DHS is a newer entrant that focuses on the 30 highest‑yielding U.S. companies while maintaining a moderate risk profile. Its 0.10% expense ratio sits nicely between the high‑yield and low‑yield funds.
• Additional Info: The link to WisdomTree provides a detailed methodology overview, showing how the fund rebalances to keep the yield high but the risk low.

Putting the Pieces Together

With $2,000 to invest, a simple strategy is to split the cash equally among the seven ETFs—about $285 per ticker. This gives you instant exposure to a spectrum of sectors (technology, consumer staples, utilities, energy, healthcare, and finance) and a blend of growth‑oriented and income‑focused companies.

Reinvestment Matters

The article emphasizes the power of a Dividend Reinvestment Plan (DRIP). Most of these ETFs offer a free DRIP, which automatically uses your dividends to buy additional shares. Reinvesting dividends compounds your returns over time, especially when combined with the “hold forever” mindset.

Tax Considerations

Dividend income is taxed at either the qualified‑dividend rate (currently 15% for most investors) or at ordinary income rates if it’s non‑qualified. The article advises keeping a close eye on the qualified dividend status of each ETF and suggests holding the investments long enough to benefit from the lower rate. If you’re in a high‑tax bracket, you might want to park a portion of the dividends in a tax‑advantaged account (IRA, Roth IRA) to defer or eliminate tax.

Risk Management

Even with diversified ETFs, the market’s cyclical nature can still affect dividend payouts. The article recommends monitoring the yield curve of each ETF: a sudden jump in yield might signal a falling price (or a potential payout cut). Rebalancing every 12–18 months can help maintain the original allocation, especially if one sector (e.g., utilities) starts to dominate the portfolio.

Bottom Line

The Motley Fool’s 2025 guide delivers a practical, low‑maintenance roadmap for turning a modest sum into a durable dividend stream. By investing in a mix of yield‑focused and growth‑oriented ETFs—each backed by reputable issuers and robust expense ratios—you can build a portfolio that pays you consistently while steadily appreciating in value. Stick to the buy‑and‑hold strategy, reinvest every dividend, and let compounding work its magic over the decades. Happy investing!