VIG and SCHD Led Five-Year Dividend ETF Payout Growth

Two of the largest U.S. dividend ETFs delivered the strongest combination of payout growth and consistency over the five years through 2025, according to an AlgovestIQ analysis of 33 dividend-focused equity funds.

Vanguard Dividend Appreciation ETF (VIG) and Schwab U.S. Dividend Equity ETF (SCHD) each increased split-adjusted annual distributions at 9.15% a year from 2020 through 2025. Neither recorded an annual payout decline across the five comparisons from 2021 through 2025.

Six funds posted higher headline compound annual growth rates: DIVB, VIGI, EFAD, DIVO, VYMI and FDVV. Their results, however, were affected by an index-methodology change, pandemic-depressed starting payouts, an unusually large year-end distribution or a favorable base year.

The distinction matters for investors comparing dividend ETFs. A high calculated growth rate can reflect the choice of starting year or a one-time payment rather than a steadily expanding income stream.

Quick answer: VIG and SCHD produced the strongest combination of dividend payout growth and consistency in AlgovestIQ's comparison. Both compounded annual payouts at 9.15% from 2020 to 2025, with no annual decline from 2021 through 2025. SCHD offered the higher current yield, while VIG charged the lower expense ratio.

Key findings

• ·VIG and SCHD tied at 9.15% annual payout growth, and neither fund recorded a calendar-year decline from 2021 through 2025.
• ·DIVB led the mechanical ranking at 13.96%, but its payout jump followed a material change in its underlying index methodology.
• ·Higher yield did not translate into stronger payout growth: the two highest-yielding funds in the comparison produced weak or negative five-year growth.

Five dividend ETFs raised payouts every year

For dividend investors who care about both growth and consistency, five ETFs raised their annual distributions in every year from 2020 through 2025.

This is not a recommendation to buy one of these funds. It is a ranking of historical fund-level cash distributions, not total return, valuation, portfolio quality or future dividend safety. Investors can examine the underlying histories on AlgovestIQ's dividend research hub and compare the two leaders directly on the VIG versus SCHD comparison page.

How the comparison was constructed

The analysis compared 33 dividend-focused equity ETFs with complete distribution records for 2020 and 2025. Bond funds, option-income strategies and other ETFs whose cash payments are not primarily comparable with corporate-dividend distributions were left out.

Two newer dividend funds were also excluded because they lacked a 2020 starting record: Capital Group Dividend Value ETF (CGDV) began paying distributions in 2022, while Schwab International Dividend Equity ETF (SCHY) launched in 2021.

Historical payments were restated for share splits before annual payouts were calculated. Partial 2026 distributions were not included.

Full ranking: 33 dividend ETFs by five-year payout growth

The table sums split-adjusted per-share distributions for each complete calendar year and compares 2020 with 2025. Partial 2026 payments are excluded. Current trailing yield, expense ratio and assets under management provide context but do not affect the ranking.

Fund pages, in rank order: DIVB, VIGI, EFAD, DIVO, VYMI, FDVV, VIG, SCHD, DVY, SMDV, DGRO, DWX, FVD, TDIV, PEY, NOBL, REGL, RDVY, DGRW, IDV, VYM, SDY, SPYD, DTD, DHS, QDF, DGS, DON, KBWD, HDV, SPHD, DIV, SDIV.

A down year is a calendar year in which adjusted distributions fell from the preceding year, counted across the five changes from 2021 through 2025.

† The fund triggered at least one robustness or comparability flag discussed below. The table preserves the mechanical arithmetic rather than silently removing inconvenient observations.

‡ KBWD's reported 5.39% expense ratio includes acquired-fund fees and expenses associated with its portfolio structure.

Values may not recompute exactly from the displayed three-decimal payouts because the CAGR uses unrounded distribution history. TTM yield, expense ratio and AUM are current values and will change.

Why the highest dividend growth rates did not hold up

Six funds rank above VIG and SCHD in the mechanical table. Their CAGRs are mathematically correct, but the underlying comparisons are not equally durable.

DIVB: an index-methodology change created a step, not steady compounding

DIVB's adjusted annual payout stayed between $0.635 and $0.759 from 2019 through 2022. It then jumped 72% to $1.307 in 2023 before flattening at $1.237 in 2024 and $1.328 in 2025.

That jump followed a December 2022 amendment to the fund's principal-investment-strategy disclosure. The SEC prospectus supplement specified a revised methodology for the Morningstar US Dividend and Buyback Index that gives dividend yield a 75% weight and net buyback yield a 25% weight. DIVB already tracked that index; the material change was to how the index selected and weighted companies. Measuring CAGR across the transition therefore combines two different portfolio-construction approaches.

DIVB's 13.96% headline payout CAGR is valid arithmetic. It should not be presented as five years of like-for-like dividend compounding.

VIGI, EFAD and VYMI: a rebound from depressed 2020 payouts

The international dividend ETFs VIGI, EFAD and VYMI all entered the measurement period with unusually weak distributions after non-U.S. companies suspended or reduced dividends during the pandemic.

• ·VIGI's 2020 payout was 21% below 2019.
• ·EFAD's was 22% lower.
• ·VYMI's was 27% lower.

Starting from those depressed bases produces headline five-year CAGRs of 13.31%, 12.67% and 11.09%. When the starting point moves back one year to 2019, the annualized rates fall to 6.81% for VIGI, 5.98% for EFAD and 3.60% for VYMI.

The recovery was real, but it was not equivalent to uninterrupted dividend growth. This is a common problem in "best dividend ETF" rankings that rely on a single trailing period without examining the preceding year.

DIVO: one December distribution dominated the result

DIVO's 2025 total included a $0.9534 December payment, more than six times the fund's median distribution. Amplify's official Rule 19a-1 notice estimated that 94% of the payment was return of capital. The notice also confirms the full-year distribution of $2.866 per share.

Removing that one outsized year-end payment reduces DIVO's 2025 total to approximately $1.913 and its five-year payout CAGR from 12.25% to 3.52%. Its 2020 base was also 36% below 2019; measured from 2019 through 2025, its annualized growth was 2.26%.

DIVO also writes covered calls tactically. Amplify states that its distributions may contain income, capital gains or return of capital. The fund is useful to investors seeking monthly income, but its cash distributions are not directly comparable with the ordinary-dividend stream of a passive dividend index ETF. See the official DIVO strategy and distribution page.

FDVV: genuine growth from a flattering base year

FDVV did not undergo a comparable strategy change, and the screen did not identify an outsized 2025 payment. Its payout growth was real. But its 2020 distribution was 20% below 2019, making the 2020–2025 rate unusually favorable.

FDVV compounded at 9.80% from 2020, but only 4.23% from 2019 through 2025. That does not invalidate FDVV as a dividend ETF; it means the headline number should be interpreted alongside the base year.

Applying all three robustness screens — no mandate discontinuity, no materially depressed 2020 base and no outsized anchor-year payment — left 21 of the 33 funds. VIG and SCHD ranked first in that more comparable group.

SCHD vs VIG: which ETF had better dividend growth?

For the 2020–2025 period, neither fund won. SCHD and VIG tied at 9.15% annualized payout growth, and both increased their annual distributions in every year.

Vanguard describes VIG as a large-cap fund emphasizing companies with records of increasing dividends. It tracks the S&P U.S. Dividend Growers Index and charges 0.04%, according to Vanguard's VIG fact sheet.

Schwab says SCHD tracks the Dow Jones U.S. Dividend 100 Index, which combines dividend history with measures of financial quality and dividend sustainability. Its expense ratio is 0.06%. See the official SCHD profile.

The trade-off is visible. SCHD provided more current dividend income, while VIG offered the lower fee and a broader dividend-appreciation orientation. The historical payout-growth tie does not make the portfolios interchangeable. Investors should still compare sector weights, valuation, concentration, volatility and total return.

Measured from 2019 instead of 2020, SCHD compounded its payout at 10.52% and VIG at 8.89%. Both remained strong, which is what separates them from the funds whose headline positions depended on an anomalous starting or ending value.

Why SCHD's 9.15% rate may differ from figures shown elsewhere

Dividend-growth figures are sensitive to their measurement window. AlgovestIQ's 9.15% rate compares complete, split-adjusted calendar-year distributions of $0.676 in 2020 and $1.048 in 2025 across five annual intervals. Websites using trailing 12-month payments, different endpoint dates or a 2019 starting year can show a rate closer to 11%.

The figures are not necessarily contradictory. Using AlgovestIQ's same adjusted history but moving the starting year to 2019 raises SCHD's annualized payout growth to 10.52%. The article uses calendar years so every ETF is measured over the same fixed period.

Dividend ETFs with no payout cuts in the five-year window

Five funds raised their split-adjusted annual distributions in every year tested: VIG, SCHD, DVY, DGRO and VYM.

Consistency does not necessarily mean rapid growth. VYM avoided every annual decline but compounded at only 3.79%, less than half the rate of VIG and SCHD. Conversely, SMDV grew distributions at 7.62% despite one down year.

For retail dividend investors, this distinction matters:

• ·CAGR measures speed. It compresses the starting and ending payouts into one annualized growth rate.
• ·Down years measure consistency. They show how often the annual cash stream declined.
• ·Current yield measures income today. It changes with both the distribution and the fund price.
• ·Total return measures the full investment outcome. It includes price changes and reinvested distributions.

No single metric answers all four questions.

Dividend growth vs high yield: the data show the trade-off

Searches for the best high-yield dividend ETF often surface the funds with the largest current distributions. That is not the same as finding the ETF with the strongest payout growth.

VIG paired a relatively low 1.51% trailing yield with 9.15% annual payout growth. At the other end of the spectrum, SDIV carried a 9.16% yield while its annual distribution fell from $3.066 to $2.305 — a negative 5.55% CAGR with three down years.

KBWD made the distinction even clearer. Its 14.50% trailing yield was the highest in the cohort, but its payout grew at only 1.85% a year from 2020 and declined at a 1.28% annual rate from 2019. Its reported 5.39% expense ratio includes substantial acquired-fund expenses associated with its portfolio structure.

SPHD offered a 4.82% trailing yield but only 0.98% annual payout growth. Its mandate emphasizes high yield and lower volatility, not maximum distribution growth.

The relationship can be summarized simply: distribution yield equals the trailing annual distribution divided by the current fund price.

An ETF can produce a high yield because its payout is large, because its share price has fallen, or both. Dividend growth investors should therefore examine the payment history rather than relying on the current yield alone.

Use AlgovestIQ's dividend calculator to translate a stated yield into estimated cash income, or the DRIP calculator to explore how reinvestment changes the result over time.

Why split-adjusted dividend history is essential

Six funds in the ranked cohort have a share split on record. Only three of those splits executed inside the 2020–2025 measurement window, and only those three change the answer.

The reason is arithmetic. A split that happens before or after the window divides every payment inside it by the same factor, so the ratio between the 2020 and 2025 totals — and therefore the growth rate — is unchanged. NOBL's 2-for-1 took effect in May 2026 and HDV's 5-for-1 in April 2026, both after the period; DON's 3-for-1 was in November 2017, nine years before the 2025 endpoint. None of the three alters its fund's five-year figure.

The three splits that land inside the window are a different matter. Left unadjusted, each one mixes two different share bases within the same series and produces the wrong answer.

A forward split gives investors more shares and reduces the distribution attached to each share. A reverse split does the opposite. Neither changes the investor's aggregate economic entitlement at the split instant. Historical distributions must be restated onto a common share basis before calculating growth.

SDIV is the clearest warning. Using an unadjusted series would move it from last place to near the top of the ranking — turning the cohort's only materially shrinking payout into its apparent fastest grower. SCHD is the most consequential, because it is one of the two funds this analysis identifies as a leader: unadjusted, the category's second-largest dividend ETF reads as a double-digit annual decline.

For this analysis, every distribution was divided by the product of the split factors taking effect after its ex-date, placing the whole series on one share basis before any growth rate was calculated.

Why an ETF's distribution can change

An ETF distribution is not a contractual corporate dividend. It is the cash a fund passes through after accounting for portfolio income, expenses, turnover, cash balances, securities lending and, where applicable, derivatives.

Several factors can change the per-share payout:

• ·Index reconstitution or a methodology change: DIVB's 2023 discontinuity shows how revised portfolio-construction rules can reset the distribution level.
• ·Sector and geographic exposure: Energy, financials, utilities and international markets contribute different income across a cycle.
• ·Economic shocks: Pandemic-era dividend suspensions still distort five-year comparisons anchored in 2020.
• ·Option premiums: Covered-call ETFs can distribute option income alongside portfolio dividends.
• ·Special distributions, capital gains and return of capital: These are economically different from ordinary dividend income.
• ·Fund expenses and securities lending: Net distributable income differs from the gross dividends received from holdings.
• ·Share splits: Historical payments must be restated to a common per-share basis.
• ·Payment timing: Moving a distribution across a December or January boundary changes calendar-year totals without necessarily changing the underlying economics.

This is why the article uses payout growth or distribution growth, not simply dividend growth, when discussing the full group.

What this dividend ETF ranking says — and what it does not

Four conclusions are supported by the data.

First, VIG and SCHD delivered the most defensible combination of payout growth and consistency: 9.15% a year, no annual payout decline from 2021 through 2025, more than $100 billion in assets each and expense ratios below 0.10%.

Second, the mechanical leaderboard is not the final answer. The six funds above VIG and SCHD were affected by an index-methodology change, depressed 2020 payouts, an outsized year-end payment or a materially flattering base year.

Third, corporate-action adjustment was decisive for the funds it touched. Three funds would have been classified incorrectly using an unadjusted series, and SDIV would have appeared to be a rapid grower rather than the only fund with a materially negative five-year CAGR.

Fourth, a higher dividend yield did not predict stronger payout growth. The cohort's highest-yielding funds delivered some of its weakest growth rates.

The analysis does not identify the universally "best dividend ETF." It does not rank total return, risk-adjusted return, tax efficiency, valuation, portfolio overlap or suitability for an individual investor. It measures the change in split-adjusted cash distributed per share between complete calendar years and then tests whether the apparent leaders are comparable.

How AlgovestIQ calculated payout growth

The comparison covers 33 dividend-focused equity ETFs with complete 2020 and 2025 distribution histories. It excludes bond, derivative-income and other strategies whose distributions are not directly comparable with dividends passed through by an equity fund.

For each eligible ETF, distributions were summed by ex-dividend calendar year after split restatement. Each adjusted payment equals the raw payment divided by the product of every split factor taking effect after that payment's ex-date. The five-year compound annual growth rate is the fifth root of the 2025 adjusted payout divided by the 2020 adjusted payout, minus one.

"Down years" counts how many of the five annual changes from 2021 through 2025 were negative.

Three robustness tests were then applied:

1. 1.A 2019-anchored CAGR to identify funds benefiting from a depressed 2020 base.
2. 2.A single-year step test to identify possible index or mandate changes.
3. 3.A distribution-size test flagging an individual payment above three times the fund's median payment, which can identify an outsized distribution in an anchor year.

The tests are diagnostic, not investment rules. The payment-size test is a magnitude heuristic rather than an issuer classification, so a genuinely large ordinary-income payment can be flagged. Distribution composition — ordinary income, capital gains or return of capital — is not separated unless issuer evidence is available. Calendar-year endpoints remain sensitive to payments near a year boundary. Partial 2026 distributions are excluded.

Historical payments are based on AlgovestIQ data, with split factors and execution dates taken from the exchange corporate-action record. Expense ratios, assets under management and fund objectives were checked against official issuer and regulatory materials. Data were reviewed through September 18, 2026.

Frequently asked questions

What is the best dividend growth ETF based on five-year payout growth?

VIG and SCHD produced the strongest comparable record in AlgovestIQ's 2020–2025 analysis. Both grew split-adjusted annual payouts at 9.15% with no annual decline from 2021 through 2025. DIVB posted a higher mechanical CAGR, but its underlying index methodology changed during the period, making the endpoints less comparable.

Which dividend ETF had the highest headline payout CAGR?

DIVB ranked first mechanically at 13.96% annualized. Its distribution level jumped after a December 2022 change to its underlying index methodology and principal-strategy disclosure, so the result does not represent five years of like-for-like dividend compounding.

Is SCHD or VIG better for dividend growth?

Neither led on historical payout growth: both recorded a 9.15% CAGR from 2020 through 2025 with zero down years. SCHD had the higher trailing yield as of September 18, while VIG had the lower expense ratio. The better choice depends on the investor's income needs, desired diversification, valuation and portfolio exposures.

Which dividend ETFs increased payouts every year?

Five funds in the 33-ETF cohort had no annual payout decline from 2020 through 2025: VIG, SCHD, DVY, DGRO and VYM. Their growth rates differed materially, so consistency and growth speed should be evaluated separately.

Does a high dividend yield mean an ETF has strong dividend growth?

No. KBWD and SDIV carried the highest trailing yields in the cohort but produced weak or negative payout growth. Yield measures current income relative to price; payout CAGR measures how the cash distribution changed over time.

Why do dividend websites report different ETF growth rates?

Differences can come from the measurement window, treatment of special distributions, calendar-year versus trailing periods, and share-split adjustments. For example, AlgovestIQ calculates SCHD at 9.15% using complete 2020 and 2025 calendar-year payouts; using 2019 as the starting year raises the rate to 10.52%. A dividend series that is not restated for a split occurring inside the measurement window can reverse the apparent conclusion entirely.

This article is for informational purposes only and is not investment, tax or financial advice. ETF distributions can change or be suspended. Past payout growth does not guarantee future income or total return.