One of the dominant early themes of 2026 has been the return of non-tech stocks. Investors have started to think twice about the potential impact of the AI boom and have begun rotating into more defensive and value-oriented areas of the market.
That shift has also benefited dividend stocks in a big way. Strategies that involve long-term dividend growth aren't necessarily exciting, but under conditions where investors take risk off the table, they can, well, pay dividends.
And they're great for a long-term buy-and-hold mindset. These stocks are often durable, high-quality, and cash-rich. They tend to hold up better in challenging economic conditions, and the dividend yields can help enhance total returns. Plus, with many brokerages requiring you to buy as little as a single share, you can get exposure for little money.
Here are three of the best dividend growth ETFs you can buy and hold forever.
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1. Vanguard Dividend Appreciation ETF
The Vanguard Dividend Appreciation ETF (VIG 1.31%) tracks the S&P U.S. Dividend Growers Index. It targets U.S. large-cap stocks that have grown their annual dividend for at least 10 straight years. Eliminating real estate investment trusts (REITs) and the top 25% of qualifying yields removes the fund as a high-income option, but it increases the quality and durability of the dividend.
NYSEMKT: VIG
Key Data Points
The fund's top five sector holdings are Technology (27%), Financials (22%), Healthcare (17%), Industrials (11%), and Consumer Staples (10%). Your mileage may vary on the high-tech sector exposure, but that's a product of the market cap-weighting strategy that includes Broadcom (AVGO 1.63%), Microsoft (MSFT 0.73%), and Apple (AAPL 1.93%).
The rest of the portfolio, however, is a nice mixture of cyclical and defensive sectors.
2. Schwab U.S. Dividend Equity ETF
The Schwab U.S. Dividend Equity ETF (SCHD 0.58%) follows the Dow Jones U.S. Dividend 100 Index. It targets stocks that demonstrate a strong combination of dividend history, balance sheet quality, and high yield. It considers fundamental factors, such as return on equity (ROE) and cash-flow-to-debt, to narrow it down to a list of 100 components that check all the boxes.
NYSEMKT: SCHD
Key Data Points
This fund's annual rebalance last year pushed the portfolio heavily into Energy (20%) and Consumer Staples (19%). That wasn't a popular mix in 2025, but it has made this ETF a top-tier performer this year. The minimal exposure to Technology (8%) has also worked in its favor recently. From a long-term perspective, this portfolio is filled with big, durable, cash-generating businesses. With earnings growth anticipated to be positive this year, with inflation under control, that's the type of environment that could continue rewarding these stocks.
3. iShares Core Dividend Growth ETF
The iShares Core Dividend Growth ETF (DGRO 1.02%) is linked to the Morningstar U.S. Dividend Growth Index. It includes companies that have at least five years of uninterrupted dividend growth and a payout ratio of less than 75%. Companies in the top decile of yields are excluded to help avoid potential yield traps. It's a less restrictive set of criteria than other dividend growth strategies, but the inclusion of a dividend sustainability screen is a positive.
NYSEMKT: DGRO
Key Data Points
This is a good example of a simple strategy that's executed well. The relatively modest annual dividend growth requirement helps capture long-term and emerging dividend growers in a single portfolio. But the inclusion of the payout ratio in the selection process as a cross-check adds a quality tilt. The mix of new and old dividend growers creates a unique portfolio that works as a long-term holding.
Overall, all three of these ETFs provide shareholders with a conservative source of predictable returns that can act as a counterbalance to growth-heavy portfolios. Many investors have done extremely well over the past few years, emphasizing tech and AI stocks in their portfolios. The rotation into defense and value in 2026 demonstrates how important dividend growth stocks are for the long term.
