3 Top Dividend ETFs to Buy in June for a Lifetime of Passive Income

Matt DiLallo, The Motley Fool

Sun, Jun 1, 2025, 12:15 PM 5 min read

• The Schwab U.S. Dividend Equity ETF holds 100 high-quality, high-yielding dividend stocks.

• The Vanguard Utilities ETF invests in utilities, which tend to pay high-yielding and steadily rising dividends.

• The Vanguard Real Estate ETF holds REITs, many of which have excellent records of increasing their high-yielding payouts.

• 10 stocks we like better than Vanguard Utilities ETF ›

Investing in exchange-traded funds (ETFs) makes it super easy to collect passive income. Many funds have income-focused strategies, which enable investors to sit back and watch the income flow into their accounts.

The Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD), Vanguard Utilities ETF (NYSEMKT: VPU), and Vanguard Real Estate ETF (NYSEMKT: VNQ) are three of the top dividend ETFs. Each fund should be able to deliver reliable passive income in the decades ahead, making them great ETFs to buy this June to collect income for the rest of your life.

The Schwab U.S. Dividend Equity ETF tracks an index (Dow Jones U.S. Dividend 100 Index) that focuses on companies that pay quality, sustainable high-yield dividends. It screens companies based on several dividend quality factors, including yield and five-year dividend growth rate.

The fund's focus on higher-yielding stocks provides investors with a higher current income stream. Over the trailing 12 months, the fund has an income yield of around 4%. That's about 3 times higher than the S&P 500's dividend yield (which is around 1.3%).

The ETF also aims to hold stocks with solid records of increasing their dividends, which should continue. As a result, the fund has steadily paid out higher distributions to its investors over the years.

The fund's current holdings have increased their dividends by more than 8% annually over the past five years. Its balanced blend of yield and growth positions this fund to provide investors with lots of passive income in the decades ahead.

The Vanguard Utilities ETF holds companies that operate in the utilities sector. These companies distribute electricity, water, or gas to customers under government-regulated rate structures or long-term contracts. Because of that, they generate stable and growing cash flow. That supports their ability to pay above-average and steadily rising dividends.

This ETF currently holds 68 utilities. These companies stand to benefit from the expected surge in power demand over the coming decades. According to some forecasters, catalysts like AI data centers, the onshoring of manufacturing, and the electrification of everything could boost U.S. power demand by 55% by 2040. That should drive up power prices and fuel growth opportunities for utilities to build more power plants and electricity transmission lines.