Passive Income Portfolio: 3 Dividend ETFs to Buy and Hold for 2025

Build your long-term passive income with these 3 powerful dividend ETFs—ideal for beginners and seasoned investors alike.

Keep more of your dividend income – tax-efficient strategy with calculator and dividend chart on laptop
< TOP3 Passive income >

1. Why Susan Stopped Chasing “High Yield”

Susan, a 38-year-old project manager from Seattle, was tired of dividend stocks that paid well but sank fast. She wanted something different—stable, growing income without the drama of individual stocks. So she turned to a passive income strategy built on ETFs.

And she’s not alone. In 2025, more U.S. investors than ever are building portfolios focused on reliable, diversified dividend ETFs—not for fast gains, but for long-term income and peace of mind.


2. The Problem: Too Many Options, Not Enough Strategy

There are hundreds of dividend-focused ETFs on the market. Some offer sky-high yields but little sustainability. Others seem safe but barely outpace inflation.

The key?
Balance. Diversification. Long-term vision.

We narrowed it down to 3 ETFs that deliver on all three.

U.S. dividend ETF comparison featuring SCHD, JEPI, and VYM logos with performance and strategy icons
< ETFs Comparison >

3. The Solution: 3 Dividend ETFs Built for Passive Income

■ 1) SCHD – Schwab U.S. Dividend Equity ETF

  • Dividend Yield: ~3.5%
  • Expense Ratio: 0.06%
  • Strategy: Focuses on quality U.S. companies with strong track records of dividend payments and financial strength.

Why it matters:

  • Includes companies like PepsiCo, Home Depot, and Texas Instruments.
  • 5-year total return ~11% CAGR
  • Low cost + long-term growth = core holding for dividend investors.
SCHD is like the S&P 500’s mature, income-generating cousin.

■ 2) JEPI – JPMorgan Equity Premium Income ETF

  • Dividend Yield: ~8.0% (monthly paid)
  • Expense Ratio: 0.35%
  • Strategy: Combines blue-chip stocks with covered call options for high income with reduced volatility.

Why it matters:

  • Monthly income stream = perfect for passive cash flow
  • Lower drawdowns than the S&P 500
  • Ideal for income-focused retirees or FIRE enthusiasts
JEPI trades some upside for peace of mind. And it pays you monthly to do so.

■ 3) VYM – Vanguard High Dividend Yield ETF

  • Dividend Yield: ~3.2%
  • Expense Ratio: 0.06%
  • Strategy: Tracks high-yielding U.S. companies excluding REITs.

Why it matters:

  • Broad diversification across sectors
  • Strong performance over 10+ years
  • Great complement to SCHD for added coverage
VYM is a classic for a reason. It’s the backbone of many long-term income portfolios.


4. Putting It All Together – Sample Portfolio Mix

ETF Weight Role in Portfolio
SCHD 40% Core dividend growth engine
JEPI 30% Monthly high-income stabilizer
VYM 30% Diversified high-yield support

- Reinvest dividends in SCHD for growth
- Use JEPI’s monthly payout for living expenses or cash cushion
- VYM balances the other two with sector variety

Pro tip: Automate contributions monthly and let compounding work its magic.


5. Ready to Build Your Passive Income?

The beauty of dividend ETFs is in their simplicity and reliability.
You don’t need to watch the market daily or time your buys. With the right mix like SCHD, JEPI, and VYM, you can build a hands-off income portfolio that grows while you sleep.

Would you start with monthly income, long-term growth, or both?
In the next post, we’ll walk through “How to Reinvest Your Dividends Strategically in 2025”—stay tuned!