The After-Tax Scorecard: 11 Dividend ETFs Ranked by What You Actually Keep
The After-Tax Scorecard: 11 Dividend ETFs Ranked by What You Actually Keep
There is no shortage of dividend ETF comparison tables on the internet. Nearly all of them share the same limitation: they rank funds by nominal total return ??the number before the IRS takes its share and before inflation erodes what's left.
That's the number in the fund's marketing material. It is not the number that determines whether you got wealthier.
So we rebuilt the scorecard. Eleven widely-held dividend ETFs, ranked three ways: nominal return, after-tax return, and real return after both taxes and inflation. The rankings do not stay the same, and one fund loses two-thirds of its performance in translation.
Our Method
We started with each fund's published 10-year annualized total return and current distribution yield. Then we applied two adjustments most comparisons skip:
1. Tax drag. We modeled a taxable brokerage account at a 24% marginal ordinary income rate and the 15% qualified dividend rate. Funds distributing qualified dividends (SCHD, VYM, DGRO, VIG, SPYV, NOBL, SDY, HDV, SPYD) get the 15% qualified rate. Covered-call funds get taxed on the character their distributions actually carry ??QYLD's option premium income at the full 24% ordinary rate, and JEPI at a blended rate (~85% ordinary, 15% qualified) reflecting its distribution profile.
2. Inflation. We subtracted 2.9% annually, approximating the 10-year average U.S. CPI rate over the period.
The result is a real return: what each fund actually added to your purchasing power in a taxable account.
The Full Scorecard (10-Year Real Performance)
| Fund | Nominal Total Return | Distribution Yield | Effective Tax Rate | Annual Tax Drag | After-Tax Return | Real Return (Net of CPI) | $10K ??Nominal | $10K ??Real Purchasing Power |
|---|---|---|---|---|---|---|---|---|
| DGRO | 13.60% | 1.72% | 15% | 0.26% | 13.34% | 10.44% | $35,792 | $26,999 |
| VIG | 13.23% | 1.69% | 15% | 0.25% | 12.98% | 10.08% | $34,643 | $26,118 |
| SCHD | 12.04% | 3.08% | 15% | 0.46% | 11.58% | 8.68% | $31,170 | $22,984 |
| SPYV | 11.72% | 1.90% | 15% | 0.28% | 11.44% | 8.54% | $30,291 | $22,683 |
| VYM | 11.30% | 2.44% | 15% | 0.37% | 10.93% | 8.03% | $29,171 | $21,657 |
| NOBL | 10.00% | 2.00% | 15% | 0.30% | 9.70% | 6.80% | $25,937 | $19,307 |
| SDY | 9.50% | 2.60% | 15% | 0.39% | 9.11% | 6.21% | $24,782 | $18,266 |
| HDV | 9.57% | 3.08% | 15% | 0.46% | 9.11% | 6.21% | $24,941 | $18,263 |
| SPYD | 8.80% | 4.08% | 15% | 0.61% | 8.19% | 5.29% | $23,243 | $16,741 |
| JEPI | 9.50% | 7.50% | 23% | 1.70% | 7.80% | 4.90% | $24,782 | $16,136 |
| QYLD | 8.38% | 11.50% | 24% | 2.76% | 5.62% | 2.72% | $22,361 | $13,078 |
Adjust your specific tax bracket and account wrapper in our interactive leaderboard below:
Dynamic After-Tax & Real Return ETF Leaderboard
Adjust tax brackets and account type to see how tax drag reshuffles the real purchasing power of 11 major dividend ETFs.
| Rank | Ticker / Fund | Nominal | Yield | Tax Drag | Real Return | $10K → Real 10-Yr |
|---|---|---|---|---|---|---|
| #1 | DGRO (Qualified) | 13.60% | 1.72% | -0.26% | 10.44% | $26,999 |
| #2 | VIG (Qualified) | 13.23% | 1.69% | -0.25% | 10.08% | $26,118 |
| #3 | SCHD (Qualified) | 12.04% | 3.08% | -0.46% | 8.68% | $22,984 |
| #4 | SPYV (Qualified) | 11.72% | 1.90% | -0.28% | 8.54% | $22,683 |
| #5 | VYM (Qualified) | 11.30% | 2.44% | -0.37% | 8.03% | $21,657 |
| #6 | NOBL (Qualified) | 10.00% | 2.00% | -0.30% | 6.80% | $19,307 |
| #7 | SDY (Qualified) | 9.50% | 2.60% | -0.39% | 6.21% | $18,266 |
| #8 | HDV (Qualified) | 9.57% | 3.08% | -0.46% | 6.21% | $18,263 |
| #9 | SPYD (Qualified) | 8.80% | 4.08% | -0.61% | 5.29% | $16,741 |
| #10 | JEPI (Blended) | 9.50% | 7.50% | -1.70% | 4.90% | $16,136 |
| #11 | QYLD (Ordinary) | 8.38% | 11.50% | -2.76% | 2.72% | $13,078 |
The Headline Finding: QYLD Loses Two-Thirds of Its Return
Look at the bottom row. QYLD's nominal 10-year return of 8.38% ??already the weakest in the group ??becomes 2.72% after tax and inflation.
That's a 5.66 percentage point haircut, and it's not evenly distributed across the field. DGRO loses 3.16 points. QYLD loses 5.66. The difference is entirely structural: QYLD's 11.5% yield taxed at ordinary rates creates a 2.76% annual tax drag, versus 0.26% for DGRO (as we analyzed in our deep-dive on QYLD NAV erosion and cash-flow reality).
In dollar terms over a decade on a $10,000 investment: QYLD's nominal $22,361 becomes a real $13,078. The purchasing power gain was just $3,078 on $10,000 over ten years ??about 2.7% a year, roughly matching a standard savings account in a good year.
The Rankings Change
Two position swaps occur when you switch from nominal to real:
| Nominal Rank | Real Rank | Fund | What Happened |
|---|---|---|---|
| 7th | 8th | HDV | Falls one place |
| 8th | 7th | SDY | Rises one place |
| 9th | 10th | JEPI | Falls one place |
| 10th | 9th | SPYD | Rises one place |
The JEPI/SPYD swap is the instructive one. On a nominal basis, JEPI (9.50%) beats SPYD (8.80%) by 0.7 points. After tax and inflation, SPYD (5.29%) beats JEPI (4.90%). JEPI's higher gross return is entirely consumed by the tax treatment of its option-premium distributions (see our JEPI tax bracket analysis).
An investor comparing the two funds on a standard comparison site would pick JEPI. In a taxable account, they'd have been better off with SPYD.
Tax Drag, Ranked
This is the column that does the damage, and it correlates almost perfectly with yield and distribution character:
| Fund | Annual Tax Drag | 10-Year Tax Drag per $10K |
|---|---|---|
| QYLD | 2.76% | $5,084 |
| JEPI | 1.70% | $3,587 |
| SPYD | 0.61% | $1,275 |
| SCHD | 0.46% | $1,262 |
| HDV | 0.46% | $1,032 |
| VYM | 0.37% | $945 |
| SDY | 0.39% | $869 |
| DGRO | 0.26% | $805 |
| SPYV | 0.28% | $764 |
| VIG | 0.25% | $768 |
| NOBL | 0.30% | $699 |
QYLD costs $5,084 in taxes over a decade on a $10,000 position. DGRO costs $805. That's a 6.3× difference in tax burden between two funds an investor might reasonably compare side by side (which reinforces the Asset Location matrix rules we established earlier).
Note also that this entire column vanishes inside a Roth IRA or 401(k). Every one of these figures is a cost of holding the fund in a taxable account ??which is precisely why asset location matters most for the funds at the top of this list.
What This Doesn't Change
Honesty requires noting what the analysis leaves intact. The top of the leaderboard doesn't move. DGRO, VIG, and SCHD occupy the same first three positions on both a nominal and a real basis, in the same order. Their lower starting yields and qualified-dividend character mean they carry almost no tax drag to begin with (as shown in our SCHD 14-year real purchasing power study).
Investors already holding those funds don't need to reconsider anything based on this table. The adjustment matters for the bottom half of the list ??the high-yield funds whose entire appeal is current income, and whose current income is exactly what generates the tax bill.
The Broader Pattern
Stack the columns and a consistent relationship emerges: the funds with the highest yields deliver the lowest real returns. SPYD, JEPI, and QYLD occupy the bottom three real-return slots, and they carry the three highest yields in the group. DGRO and VIG lead on real return and carry the two lowest yields.
That inversion isn't a coincidence or a quirk of this particular decade. It reflects two compounding forces:
- High-yield funds distribute more of their return as taxable income rather than retaining it as unrealized capital appreciation.
- The strategies that generate very high yields ??covered calls, extreme yield screens ??structurally sacrifice upside to do it (modeled in our 12-year income vs. growth allocation study).
The tax code then amplifies the gap, because it taxes the very thing high-yield funds produce most of.
What This Model Doesn't Capture
- Tax-advantaged accounts. Every tax figure here applies only to taxable brokerage accounts. Inside an IRA or Roth, the drag column is zero and the rankings revert to nominal order.
- Your bracket. We used 24% ordinary and 15% qualified. Lower-bracket investors may pay 0% on qualified dividends, widening the gap between fund types. Higher-bracket investors face 32??7% ordinary rates, widening it further.
- Distribution character varies. Covered-call funds' qualified/ordinary/return-of-capital split changes annually and is finalized only on the 1099-DIV.
- State taxes excluded. Federal only. High-tax states widen every gap above.
The Bottom Line
Nominal return is the number funds advertise. Real return is the number that buys groceries.
Across eleven popular dividend ETFs, the gap between them ranged from 3.16 percentage points (DGRO) to 5.66 (QYLD) ??and it was widest exactly where investors are most often drawn, at the high-yield end of the spectrum. QYLD's decade-long 8.38% becomes 2.72%. JEPI drops below a fund it beats on paper.
None of this makes high-yield funds unusable. It makes them account-dependent in a way low-yield dividend growth funds are not. Put them where the tax drag disappears, or accept that a meaningful portion of the yield you're buying will never reach your wallet.