If you're a dividend investor, the 3rd quarter was probably one you'd prefer to forget. The late September swoon brought the total return on the S&P 500 down to just under 1% for the entire quarter, but most dividend ETFs failed to generate even that modest return. In fact, the ETF Action database that I use for my research shows just 8 funds returning 1% or more during Q3 and only one returning more than 2%.

The events of the past week or so change the narrative a bit going forward, but over the past three months, the "growth over value" trade continued to be the winner for investors. Small-caps lagged large-caps again, but in that group it was actually the Russell 2000 Value index (IWN) that beat the Russell 2000 Growth index (IWO) by nearly 3%. Small-cap dividend ETFs outperformed the Russell 2000 during the 3rd quarter, but the relative underperformance of this group in general means most failed to crack the top 30 list below.

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Many of this month's top performing dividend ETFs actually come from overseas, an area of the market that is significantly underweight in most investor portfolios. Emerging markets dividend ETFs were among the best performers, but there's representation from all across the globe. In line with the general risk-on sentiment that was prevalent throughout the quarter, high yielders tended to do better than the dividend growth or dividend quality themes, but there's still a relatively diverse mix. No theme really stands out over another as the range of returns was pretty tight overall.

Here's the list of the top performing dividend ETFs for the 3rd quarter of 2021.

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The top spot belongs to the WisdomTree Japan Small Cap Dividend ETF (DFJ), a fund which more than doubled the total return of its next closest competitor. The country has been improving as an investment opportunity lately thanks to a strengthening post-COVID economic recovery and optimism surrounding the installation of a new government following the resignation of former prime minister Shinzo Abe. There are talks of additional stimulus measures as well as strong pandemic responses and investors have so far liked what they've heard.

The iShares Emerging Markets Dividend ETF (DVYE) and the ALPS Emerging Sector Dividend Dogs ETF (EDOG) also land top 5 spots. Emerging markets mostly lagged the S&P 500 during the quarter although there was something of a comeback in the 2nd half of it. The non-China emerging markets actually didn't fare too badly in Q3 and the below average allocations to China in these two ETFs no doubt helped their relative performance, especially EDOG, which has just 9% allocated to China vs. more than 30% in the broad EM indices.

Over on the U.S. side, the First Trust Dorsey Wright Momentum & Dividend ETF (DDIV), the Invesco KBW Premium Yield Equity REIT ETF (KBWY) and the Invesco KBW High Dividend Yield Financial ETF (KBWD) all cracked the top 10. Many momentum ETFs rebalanced earlier this year following the first cyclical rebound, so many are now overweight in these sectors, including DDIV, which has a nearly 50% allocation to financials. It hasn't been a popular position throughout much of 2021, but it did benefit in Q3 when rates were rising and cyclicals somewhat came back into favor.

KBWB and KBWD are among the riskiest dividend ETFs you'll find, but the overweights in real estate and financials, respectively, as well as some of the positive sentiment around high yield products played into their favor. The current yields of 6-8% will be attractive, but they come with a fair amount of risk.

Other ETFs worth noting:

I've been intrigued by the VictoryShares U.S. Large Cap High Dividend Volatility Weighted ETF (CDL) due to its unique methodology that targets riskier high yielders, but volatility weights the portfolio to tamp down the risk within that group. The return of just over 1% won't necessarily get investors excited, but it does offer an interesting balance between risk and yield. The VictoryShares U.S. Equity Income Enhanced Volatility Weighted ETF (CDC) and the VictoryShares Emerging Markets High Dividend Volatility Weighted ETF (CEY) are also on the list.

The best performing dividend growth ETFs for the quarter were ProShares S&P Technology Dividend Aristocrats ETF (TDV) and the T. Rowe Price Dividend Growth ETF (TDVG). The tech sector was a mix of performance during the quarter, but the equal-weighted nature of TDV allowed some of the sector's lesser-known names the opportunity to lift performance. TDVG was launched just last year and is patterned after its mutual fund counterpart, the T. Rowe Price Dividend Growth Fund (PRDGX).

Looking for some of the major players? The iShares Core Dividend Growth ETF (DGRO) and the Vanguard Dividend Appreciation ETF (VIG) make the top 30. Both, however, were virtually breakeven for the quarter with VIG even posting a modest loss.

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Also read:

Top Performing ETFs For Q3 2021

3 Top ETF Picks For October 2021

Top Performing Dividend ETFs For September 2021

Top Performing ETFs For September 2021

VIG vs. NOBL vs. SDY: Does Adding High Yield Help A Dividend Growth Strategy

SPY vs. VOO vs. IVV: There IS A Difference Between These S&P 500 ETFs

The Simple 2 Vanguard ETF Portfolio That Gives You (Almost) Everything You Need