One of the questions I get the most is:
"I want to start dividend investing, but I only have a few hundred dollars. Where do I even begin?"
Truth is, most popular dividend ETFs are expensive. VM trades over $150 a share. DVY is above $153. VO? Over $600. That’s not beginner-friendly.
But here’s the good news: there are three dividend ETFs under $50 right now that can kickstart your passive income journey. One yields over 4.8%, another recently did a three-for-one stock split to become more accessible, and the last quietly returned almost 22% last year—yet barely anyone is talking about it.
Quick disclaimer: I’m not a financial advisor. This isn’t financial advice. Always do your own research before investing.
Let’s break down each ETF, what it holds, its yield, and how much income you could generate—even starting with just $5,000.
1️⃣ SCHD – Schwab U.S. Dividend Equity ETF
SCHD is the most popular dividend ETF among investors, but it used to be expensive. Before October 2024, one share cost around $85—hard to buy in small amounts.
Then Schwab executed a three-for-one stock split. One share became three, and the price dropped to about $28 overnight. Today, SCHD trades around $31.11.
✅ With $500, you can now buy 16 shares.
✅ $5,000 buys over 160 shares.
The fund holds 104 high-quality dividend stocks with a 0.06% expense ratio and a 3.37% yield. Top holdings include Broadcom, AbbVie, Coca-Cola, and Home Depot.
Performance highlights:
1-year return: 15.24%
10-year annualized: 12.8%
💰 Example: $5,000 in SCHD = ~$168/year in dividends. Add $500/month for 5 years → potentially $38,400 invested, generating $1,200+/year in dividends.
SCHD is solid, reliable, and perfect as your dividend foundation.
2️⃣ SPYD – SPDR Portfolio S&P 500 High Dividend ETF
SPYD focuses on income-first investing. Instead of quality metrics like SCHD, it buys the 80 highest-yielding S&P 500 stocks in equal weight.
✅ Trades at $47.25
✅ Yield: 4%
✅ Expense ratio: 0.07%
SPYD is heavy in REITs (21%), utilities (13%), and financials (17%), making it a cash-generating powerhouse.
⚠️ Note: REIT dividends are taxed as ordinary income in taxable accounts, so it shines in retirement accounts like Roth IRAs.
💰 Example: $5,000 → 105 shares → ~$200/year in dividends. Over 5 years with $500/month contributions, your portfolio could grow significantly, putting more cash in your pocket than SCHD.
3️⃣ FDL – First Trust Morningstar Dividend Leaders Index Fund
FDL is the hidden gem nobody talks about.
✅ Trades at $44.72
✅ 1-year return: 21.95%
✅ 5-year annualized: 13.2%
✅ Yield: 4.85% (highest on this list)
It tracks ~100 high-yield, consistent dividend stocks, excluding REITs. Heavy exposure to energy and healthcare, with top holdings like ExxonMobil, AbbVie, Philip Morris, Verizon, and Chevron.
💰 Example: $5,000 → ~111 shares → ~$242/year in dividends. Over 5 years with $500/month contributions, potential portfolio growth could reach $42,100.
✅ So, Which ETF Should You Pick?
SCHD: The safest, most proven foundation with the lowest fees. Think Toyota Camry of dividend ETFs.
SPYD: Maximize current income in a tax-advantaged account, with exposure to high-dividend sectors.
FDL: Highest yield and consistent returns, worth the slightly higher expense ratio.
The best part? All three ETFs trade under $50 per share. With $5,000, you could own shares in all three, covering 280+ companies, yielding ~4% average, and costing less than $0.20/day in fees.
You don’t need $20,000 to start building dividend income—you need $50 and a plan.
💡 Ready to start? Buy these ETFs today with Moomoo and take your first step toward passive income:
Start Investing on Moomoo
#DividendInvesting #PassiveIncome #InvestSmart #ETFInvesting #FinancialFreedom
