The hunt for dividend in the equity market is always steady irrespective of how it is behaving. After all, who doesn’t like a steady stream of current income along with capital gains? And if investors are caught in the web of equity market uncertainty and global growth worries, the lure for dividend investing increases.
This is what happened in 2020 for global markets. Stocks took a dive in March on the COVID-19-induced lockdowns and recovered from the second quarter on massive fiscal and monetary policy easing. However, rising COVID-19 cases continued to pose a threat to the market rally. Apart from these, the oil price slump played foul. Overall, the S&P 500 is up about 14.8% this year.
How Did Dividend ETFs Fare?
Given the corporate cash crunch and announcement of dividend cuts, dividend ETFs struggled this year. U.S. treasury bond yields have been extremely low. People rushed toward the safe-haven treasuries and some quality ETFs.
Investors should note that not all dividend stocks serve the same purpose. While the high-yield ones are known for offering hefty current income, stocks with dividend growth point to quality investing – a pre-requisite to making money in this volatile environment. These companies – known as dividend aristocrats – are usually good for value investing and are in demand when volatility flares up.
Against this backdrop, below we highlight a few dividend ETFs that beat the S&P 500, even in this tough year for dividends.
ETFs in Focus ProShares S&P Technology Dividend Aristocrats ETF ( TDV Quick Quote TDV - Free Report) – Up 27.3%
The underlying S&P Technology Dividend Aristocrats Index targets companies from information technology, internet and direct marketing retail, interactive home entertainment, and interactive media and services segments of the economy. The fund became a winner because it hails from the winning sector of 2020 – technology. The fund charges 46 bps in fees and yields 0.88% annually.
Reality Shares DIVCON Leaders Dividend ETF ( LEAD Quick Quote LEAD - Free Report) – Up 22.5%
The underlying Siren DIVCON Leaders Dividend Index capitalizes on the theory that, over time, companies that consistently grow their dividends tend to have investment returns above overall market returns and companies that do not grow their dividends tend to have investment returns below overall market returns. The fund charges 43 bps in fees and yields 1.16% annually (read:
Fearing a Cut in Current Income? 5 Safe Dividend ETFs). Global X YieldCo & Renewable Energy Income ETF – Up 18.5%
The underlying Indxx YieldCo & Renewable Energy Income Index is designed to provide exposure to publicly traded companies that are formed to own operating assets that produce defined cash flows, as well as companies that are involved in the production of renewable energy such as solar, wind and hydroelectric power that meet minimum dividend yield criteria. It charges 65 bps in fees and yields 2.82% annually.
Nationwide Risk-Managed Income ETF ( NUSI Quick Quote NUSI - Free Report) – Up 17.5%
This ETF is active and does not track a benchmark. The Nationwide Risk-Managed Income ETF seeks current income with downside protection. It yields about 7.45% annually and charges 68 bps in fees (read:
Earn 7% Plus Yield With These ETFs). First Trust NASDAQ Technology Dividend Index Fund ( TDIV Quick Quote TDIV - Free Report) – Up 16.7%
The underlying NASDAQ Technology Dividend Index includes up to 100 Technology and Telecommunications companies that pay a regular or common dividend. The fund charges 50 bps in fees and yields 1.26% annually (read:
Value or Growth: Which ETFs to Play Ahead?). Want key ETF info delivered straight to your inbox?
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