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The year 2022 as a whole could easily be attributed to the Russia-Ukraine war, red-hot inflation and rising-rate worries. No wonder, such worries caused an upheaval in the market this year. In Q1, Wall Street witnessed its worst performance in two years. Q2 also did not offer any respite to investors.
Year to date, the Dow, the S&P 500 and Nasdaq are all deep in correction territory (down at least 10% from the previous record high), with the Nasdaq getting a massive battering as the tech-heavy index is in the red (down at least 20% from the previous high).
Heightened rising rate worries amid super-hawkish cues from the Fed and the resultant recessionary fears have bummed out Wall Street this year. Overall, the S&P 500 is down 18.2% in 2022. The Nasdaq Composite is off 26%, the Dow Jones has lost about 13.5% while the Russell 2000 has skidded 21% year to date.
The benchmark treasury yield hovered in the range of as high as 1.63% to 3.49% this year on faster Fed rate hikes. To contain the red-hot inflation, central banks are tightening policies. The Fed had enacted three rate hikes so far this year and pushed through a total hike worth of 150 basis points.
Against this backdrop, dividend ETFs acted as a great safety. Be it a bull or a bear market, investors mostly love dividend-paying stocks. After all, who doesn’t like a steady stream of current income along with capital appreciation?
Even if the stock or the fund falls, higher current income would go a long way in protecting investors’ total returns. After all, high-dividend ETFs provide investors with avenues to make up for capital losses, if that happens at all.
Below we highlight a few top-performing dividend ETFs of this year that yielded handsomely too.
ETFs in Focus
iShares Core High Dividend ETF (HDV) – Up 1.9%; Yields 3.10% annually
The underlying Morningstar Dividend Yield Focus Index offers exposure to high quality U.S. domiciled companies that have had strong financial health and an ability to sustain above average dividend payouts.
Pacer Global Cash Cows Dividend ETF (GCOW - Free Report) – Up 1.7%; Yields 4.59% annually
The underlying Pacer Global Cash Cows Dividend Index uses an objective, rules-based methodology to provide exposure to global companies with high dividend yields backed by a high free cash flow yield.
WisdomTree US High Dividend Fund (DHS - Free Report) – Up 1.6%; Yields 3.35% annually
The underlying WisdomTree U.S. High Dividend Index is a fundamentally weighted index that measures the performance of companies with high dividend yields selected from the WisdomTree Dividend Index.
First Trust Morningstar Dividend Leaders Index Fund (FDL - Free Report) – Up 1.5%; Yields 4.37% annually
The underlying Morningstar Dividend Leaders Index consists of stocks listed on one of the three major exchanges, NYSE, NYSE Amex or Nasdaq, that have shown dividend consistency and dividend sustainability.
Invesco High Yield Equity Dividend Achievers ETF (PEY - Free Report) – Up 0.8%; Yields 4.02% annually
The underlying NASDAQ US Dividend Achievers 50 Index is comprised of 50 stocks selected principally on the basis of dividend yield and consistent growth in dividends.
The underlying S&P 900 Dividend Revenue-Weighted Index is constructed using a rules-based methodology that starts with the S&P 900 Index, subject to a maximum 5% per company weighting.
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Market-Beating Dividend ETFs of 1H
The year 2022 as a whole could easily be attributed to the Russia-Ukraine war, red-hot inflation and rising-rate worries. No wonder, such worries caused an upheaval in the market this year. In Q1, Wall Street witnessed its worst performance in two years. Q2 also did not offer any respite to investors.
Year to date, the Dow, the S&P 500 and Nasdaq are all deep in correction territory (down at least 10% from the previous record high), with the Nasdaq getting a massive battering as the tech-heavy index is in the red (down at least 20% from the previous high).
Heightened rising rate worries amid super-hawkish cues from the Fed and the resultant recessionary fears have bummed out Wall Street this year. Overall, the S&P 500 is down 18.2% in 2022. The Nasdaq Composite is off 26%, the Dow Jones has lost about 13.5% while the Russell 2000 has skidded 21% year to date.
The benchmark treasury yield hovered in the range of as high as 1.63% to 3.49% this year on faster Fed rate hikes. To contain the red-hot inflation, central banks are tightening policies. The Fed had enacted three rate hikes so far this year and pushed through a total hike worth of 150 basis points.
Against this backdrop, dividend ETFs acted as a great safety. Be it a bull or a bear market, investors mostly love dividend-paying stocks. After all, who doesn’t like a steady stream of current income along with capital appreciation?
Even if the stock or the fund falls, higher current income would go a long way in protecting investors’ total returns. After all, high-dividend ETFs provide investors with avenues to make up for capital losses, if that happens at all.
Below we highlight a few top-performing dividend ETFs of this year that yielded handsomely too.
ETFs in Focus
iShares Core High Dividend ETF (HDV) – Up 1.9%; Yields 3.10% annually
The underlying Morningstar Dividend Yield Focus Index offers exposure to high quality U.S. domiciled companies that have had strong financial health and an ability to sustain above average dividend payouts.
Pacer Global Cash Cows Dividend ETF (GCOW - Free Report) – Up 1.7%; Yields 4.59% annually
The underlying Pacer Global Cash Cows Dividend Index uses an objective, rules-based methodology to provide exposure to global companies with high dividend yields backed by a high free cash flow yield.
WisdomTree US High Dividend Fund (DHS - Free Report) – Up 1.6%; Yields 3.35% annually
The underlying WisdomTree U.S. High Dividend Index is a fundamentally weighted index that measures the performance of companies with high dividend yields selected from the WisdomTree Dividend Index.
First Trust Morningstar Dividend Leaders Index Fund (FDL - Free Report) – Up 1.5%; Yields 4.37% annually
The underlying Morningstar Dividend Leaders Index consists of stocks listed on one of the three major exchanges, NYSE, NYSE Amex or Nasdaq, that have shown dividend consistency and dividend sustainability.
Invesco High Yield Equity Dividend Achievers ETF (PEY - Free Report) – Up 0.8%; Yields 4.02% annually
The underlying NASDAQ US Dividend Achievers 50 Index is comprised of 50 stocks selected principally on the basis of dividend yield and consistent growth in dividends.
Invesco S&P Ultra Dividend Revenue ETF (RDIV - Free Report) – Up 0.5%; Yields 3.35% annually
The underlying S&P 900 Dividend Revenue-Weighted Index is constructed using a rules-based methodology that starts with the S&P 900 Index, subject to a maximum 5% per company weighting.