2 Dividend ETFs to Buy With $500 and Hold Forever

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RegExp("[?&]notifications=1(&|#|$)");"desktop"===y&&i&&b.test(window.location.search)&&(i.checked=!0)};be("ybar-mod-notification",(function(e){var t={isUH3:"crunch"===e.getConfig().ytheme,notifContainer:document.getElementById("notification-container"),notifBadge:document.getElementById("notif-badge"),notifMenu:document.getElementById("ybarNotificationMenu"),notifMenuOpener:document.querySelector("#ybarNotificationMenu + label"),notifDropdown:document.getElementById("notifDropdownContainer"),tooltipContainer:document.querySelector(".".concat(Vn)),notifLabel:document.querySelector(".".concat($n))};t.notifDropdown&&ro(e,t)}))}()}};]]>Reuben Gregg Brewer, The Motley FoolSat, Jul 5, 2025, 10:18 PM 5 min readDividend investors generally fall into two broad categories, seeking either dividend growth or high yield.The Vanguard Dividend Appreciation ETF will appeal to dividend growth investors.The Schwab U.S. Dividend Equity ETF is for those seeking a high yield.10 stocks we like better than Vanguard Dividend Appreciation ETF ›If you have $500 to invest and love dividends, you have plenty of stocks to choose from. But $500 won't necessarily get you a diversified portfolio of individual stocks.For that sum, you may be better off buying an exchange-traded fund (ETF) that prioritizes dividend income. Two of the best options for buy-and-hold investors today are the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) and the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD). Each one appeals to a different kind of income investor.Most dividend investors look first at a stock's yield, but another important factor is the growth potential of the dividend over time. This is exactly the focus of the Vanguard Dividend Appreciation ETF. While the ETF's yield is only around 1.8% as of this writing, the quarterly dividend has nearly doubled over the past decade, and that payout growth has been accompanied by a roughly 170% increase in the share price of the ETF.Data by YCharts.To achieve this result, the ETF follows the S&P U.S. Dividend Growers index, which looks at all U.S. companies that have increased their dividends for a decade or longer. The index then removes the highest yielding 25% of the list. What's left is included in the index -- and the ETF -- weighted by market cap. The expense ratio is a very low 0.05%.While the yield today may not excite you, that's not what the Vanguard Dividend Appreciation ETF is trying to do. It is attempting to provide you with growth of capital and income. With $500, you can buy two shares of the ETF, which will start you along an investment journey that can lead to a very attractive retirement portfolio years from now.Image source: Getty Images.If you don't have that much time before you retire and would like to generate a little more income in the here and now, then the Schwab U.S. Dividend Equity ETF might be a better choice. It is offering a nearly 4% yield as of this writing and also comes with a modest expense ratio of 0.06%. But the big question is: What backs the yield?The Schwab U.S. Dividend Equity ETF tracks the Dow Jones U.S. Dividend 100 index. Its construction is a lot more complex than the index backing the Vanguard ETF. But in essence, the Dow Jones U.S. Dividend 100 index follows some of the core criteria you would likely follow if shopping for individual stocks.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,279.35 +51.93 (+0.83%)Dow 3044,828.53 +344.11 (+0.77%)Nasdaq20,601.10 +207.97 (+1.02%)Russell 20002,249.04 +22.66 (+1.02%)VIX17.48 +1.10 (+6.72%)Gold3,346.50 +3.60 (+0.11%)PortfolioSign in to access your portfolioSign inTop gainersBMNR Bitmine Immersion Technologies, Inc. 135.00 +76.50 (+130.77%)RUN Sunrun Inc. 10.50 +1.51 (+16.80%)TRIP Tripadvisor, Inc. 17.50 +2.51 (+16.74%)DDOG Datadog, Inc. 155.15 +20.14 (+14.92%)SYM Symbotic Inc. 47.91 +5.71 (+13.53%)Top losersLEN Lennar Corporation 110.12 -4.69 (-4.09%)LEN-B Lennar Corporation 105.62 -4.37 (-3.97%)ESGRP Enstar Group Limited 19.45 -0.79 (-3.91%)HOOD Robinhood Markets, Inc. 94.40 -3.58 (-3.65%)BG Bunge Global SA 78.44 -2.95 (-3.62%)Most activeLCID Lucid Group, Inc. 2.1600 +0.1100 (+5.37%)NVDA NVIDIA Corporation 159.34 +2.09 (+1.33%)INTC Intel Corporation 22.49 +0.61 (+2.79%)F Ford Motor Company 11.81 +0.04 (+0.34%)TSLA Tesla, Inc. 315.35 -0.30 (-0.10%)Earnings eventsTrending tickersLKNCY Luckin Coffee Inc. 38.49 +0.50 (+1.32%)GRNY Tidal Trust III - Fundstrat Granny Shots US Large Cap ETF 22.87 +0.23 (+1.02%)MMM 3M Company 152.94 -1.03 (-0.67%)XRP-USD XRP USD 2.21 -0.01 (-0.42%)SCHD Schwab U.S. Dividend Equity ETF 27.35 +0.04 (+0.15%)Top economic events