Dividends, both foreign and domestic, are on the move higher.

Global dividend reached $1.03 trillion last year with S&P 500 member payouts rising to a record of nearly $312 billion. [At Least EM Dividends are Rising]

Seemingly alongside rising payouts, the number of dividend-focused exchange traded funds is increasing as well with an emerging theme being an emphasis on dividend growth. It is easy to see why. Savvy income investors know the advantages of stocks that raise payouts in “set your clock by it” fashion. From 1972 through 2012 companies that initiated or consistently raised dividends outperformed and were less volatile than the companies either did not pay, cut or kept dividends stagnant, according to Ned Davis Research. [Dividend Growth Via ETFs]

Dividend growth not only fosters added income and returns, but can also act as an inflation-fighting tool. Since the early 1970s, when inflation ran as high as 11% per year, aggregate annual dividends of the S&P 500 have grown more than 1,000%, to $34.99 from $3.16 a share, Maxwell Murphy reports for the Wall Street Journal, citing Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

That $3.16 per share would be worth $19.05 today, the Journal reports, indicating dividend growth has easily trumped inflation. “Since the early 1980s, another rough period for inflation, dividends have grown 519%, and that is 2.8 times the rate of inflation. But since 2010, dividends have outpaced inflation by nearly eight times,” according to the Journal.

Dividend growth as a means of trumping inflation could and arguably should serve to highlight the advantages of the ETFs that focus on dividend growth stocks. That group is comprised of well-established ETFs that emphasize dividend increase streaks as well as a new breed of funds that look for sectors chock full of stocks that have the potential to be future sources of dividend growth. [Not Quite Your Grandad’s Dividend ETF]

The Vanguard Dividend Appreciation ETF (NYSEArca: VIG) has become the largest U.S. dividend ETF due to a combination of low fees (at 0.1% per year, VIG is cheaper than 91% of rival products) and dependable constituent dividends. VIG tracks the NASDAQ US Dividend Achievers Dividend Index, which requires at least 10 straight years of dividend increases for entry. [These Dividend Indices Delivered in 2013]

The NASDAQ US Broad Dividend Achievers Index, the underlying index for the PowerShares Dividend Achievers Portfolio (NYSEArca: PFM), also requires dividend increase streaks of at least decade. The SPDR S&P Dividend ETF (NYSEArca: SDY) and the ProShares S&P 500 Aristocrats ETF (NYSEArca: NOBL) go even as the dividend aristocrats indices tracked by those funds require dividend increase streaks of 25 years.

In particular, VIG and SDY have proven wildly successful with ETF income investors, but some newer ETFs could prove to be credible dividend growth options and, as a result, legitimate inflation-fighting funds as well.

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