Total return reflects both price appreciation and reinvested dividends, and over time, reinvesting those dividends can dramatically boost wealth. A comparison of two SPY investors from 2023 to 2025 shows that reinvesting dividends produced a 10.12% annualized return versus just 8.14% without reinvestment. 

While that difference seems small, compounding turns $10,000 into $223,691 over decades—versus only $124,424 for the non-reinvestor. Dividend growth accelerates this compounding effect, as rising payouts generate more shares, more dividends, and stronger long-term momentum. 

Dividend growth ETFs specifically target companies with consistent and sustainable dividend increases, setting them apart from high-yield or dividend-quality funds that use different selection criteria. 

Finsum: After screening for dividend growth opportunities, low costs, strong liquidity, and meaningful scale are some of the most important factors