3 Dividend ETFs That Could Replace Bond Income in 2026

Core Insights - Income investors have faced challenges due to minimal yields from bonds and significant capital losses during the 2022 inflation scare [1][3] - The iShares 20+ Year Treasury Bond ETF has lost 11% over the past decade and is approximately 40% below its all-time high, while the iShares iBoxx $ Investment Grade Corporate Bond ETF has returned about 32% in the same period, indicating tough times for fixed income investments [2] - The current economic environment, characterized by stubborn inflation and soaring federal debt levels, may hinder bond yields from decreasing significantly, suggesting that bonds may remain under pressure for the foreseeable future [3] Dividend Equity ETFs - The Schwab U.S. Dividend Equity ETF (SCHD) employs a strategy that evaluates dividend payment history, balance sheet health, and high yield, making it a popular choice among dividend ETFs [5] - This ETF has shown a strong performance in 2026 after previous struggles, with a 3.5% dividend yield appealing to income-seeking investors [6] - The Vanguard High Dividend Yield ETF (VYM) focuses on selecting the top half of forecasted dividend yields from a broad universe of dividend-paying stocks, offering a straightforward approach to high-yield investing [7]