3 Dividend ETFs Outpacing the S&P 500

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The S&P 500 is starting to pick up speed going into late-October after experiencing a bit of volatility on the back of the government shutdown, new Trump tariff threats, and a few early quarterly earnings fumbles. Despite the temporary setbacks, the dip-buyers have been more than willing to brave the dips, and that’s made it tough to score anything more than a 2% or so dip from the S&P’s all-time highs.

Either way, it’s going to be an interesting final two months for the S&P as market watchers look for the index to hit the 7,000 mark and perhaps even a full-year gain north of the 20% mark. Even with all the correction fears and AI bubble chatter, stocks seem to want to rally higher as more quarterly earnings results begin to flow in.

With a well-received CPI report giving lift to the S&P, the stage certainly seems set for a strong finish, with AI stocks leading the way. While the S&P continues to be a great long-term bet for many, I think it’s worthwhile to enhance one’s diversification further with dividend ETFs that are every bit as hot as the S&P. In fact, the following higher-yielding ETFs have been outpacing the S&P so far this year, a trend that could carry into the final few months of the year.

Capital Group Dividend Value ETF

Capital Group Dividend Value ETF (NYSEARCA:CGDV) is a highly underrated active dividend ETF, at least in my view, that investors may wish to consider diversifying into after its remarkable, nearly 22% year-to-date run.

With a modest 1.33% dividend yield, the ETF only offers a hair more than the SPY. Still, the main attraction to this U.S. equity ETF isn’t as much about the yield as it is about the long-term dividend growth potential. With a focus on going after dividend growers at a reasonable price, I think longer-term income investors will be better able to tame volatility (0.88 beta) without having to sacrifice all too much in the way of capital gains.

The ETF has a gold medal from Morningstar for a reason. It has stellar portfolio managers and a unique methodology that seems to offer a great balance for investors who want something cheaper, but still growth-heavy, with names like Broadcom (NASDAQ:AVGO) at the core of the fund. 

In short, compared to the S&P, the CGDV offers slightly more yield, slightly better gains year-to-date, slightly lower valuations, while exhibiting slightly less volatility. That’s a gold medal well-earned, in my humble opinion.

Vanguard International High Dividend Yield ETF

Vanguard International High Dividend Yield ETF (NYSEARCA:VYMI) is another worthy dividend ETF that I’ve pounded the table on in prior pieces, especially for the many investors who are overinvested in the U.S., with not much in the way of international diversification.

In 2025, the VYMI gained just shy of 26%. And there’s a good chance the ETF cracks the 30% mark before the year comes to a close. With much lower valuations and exposure to some non-U.S. innovators that have promising growth profiles, perhaps the VYMI is a great bet for those insistent on stretching their investment dollar further.

With names like Novo Nordisk (NYSE:NVO) going for 13.6 times trailing price-to-earnings (P/E), I’d argue value investors have a lot to gain by broadening their horizons. Perhaps the relative outperformance of the VYMI should serve as an example for why it’s good to have a portion of the portfolio in global names.

Finally, the 3.95% dividend yield punches above its weight class and could be a more suitable contender for momentum and income investors alike as we head into the holidays.

iShares International Select Dividend ETF

iShares International Select Dividend ETF (IDV) is another international dividend ETF that seems to be leaving the S&P behind, with an oustanding 36% year-to-date gain in the books. And with a 4.8% dividend yield, the IDV certainly stands out as one of the more heated income ETFs to go after, especially for those seeking more of a value and yield tilt and are willing to settle for less high-tech growth.

If you’ve never heard of most of the top-10 holdings in the IDV, you’re definitely not alone. Either way, the IDV is all about value and yield within the developing markets, with more than its fair share of exposure to the far-cheaper European market.

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