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Dividend stocks have been beating the market for quite some months. The year 2022 as a whole could easily be attributed to the Russia-Ukraine war, red-hot inflation and rising-rate worries. While inflation started showing signs of cooling and the pace of central banks’ rate hikes slowed, the investing landscape for early 2023 has not changed much.
Dividend investing was in vogue last year amid huge volatility and uncertainty. This was especially true as dividend stocks and ETFs are major sources of consistent income for investors in any type of market though they do not offer dramatic price appreciation. These stocks tend to outperform in volatile markets and can reduce the volatility of a portfolio.
Dividend ETFs have seen more than $50 billion in inflows this year, according to GraniteShares, making it one of the most reliable and best-performing fund categories in 2022, as quoted on CNBC. Against this backdrop, below we highlight a few dividend ETFs that are rising fast in prices to start 2023.
High-dividend ETFs have been gaining more than dividend aristocrats. Since rising rates have been prevalent, investors are interested in equities that have the potential to offer capital appreciation as well as benchmark-beating yields. After all, dividends are one of the ways to ride out the turbulent times (read: 5 Cheap Dividend ETFs to Buy and Hold for 2023).
ETFs in Focus
Invesco KBW High Dividend Yield Financial ETF (KBWD - Free Report) – Up 10.5% YTD; Yields 6.69%
The underlying KBW Nasdaq Financial Sector Dividend Yield Index is a dividend-yield-weighted index seeking to reflect the performance of approximately 24 to 40 publicly listed financial companies engaged in the business of providing financial services and products, including banking, insurance and diversified financial services, in the United States. The fund has a Zacks Rank #2 (Buy).
Invesco S&P SmallCap High Dividend Low Volatility ETF (XSHD - Free Report) – Up 9.63% YTD; Yields 6.60%
The underlying S&P SmallCap 600 Low Volatility High Dividend Index comprises 60 securities in the S&P SmallCap 600 Index that have historically provided high dividend yields with lower volatility over the past 12 months. The fund charges 30 bps in fees.
The underlying KBW Nasdaq Premium Yield Equity REIT Index is a dividend-weighted index seeking to reflect the performance of approximately 24 to 40 small- and mid-cap equity REITs in the United States. The fund charges 35 bps in fees.
First Trust STOXX European Select Dividend Index Fund (FDD - Free Report) – Up 8.71% YTD; Yields 5.62%
The underlying STOXX Europe Select Dividend 30 Index consists of 30 high-dividend-yielding securities selected from the STOXX Europe 600 Index. The fund charges 58 bps in fees.
WBI Power Factor High Dividend ETF (WBIY - Free Report) – Up 8.10% YTD; Yields 4.08%
The underlying Solactive Power Factor High Dividend Index tracks the performance of 50 U.S.-listed stocks among large, mid and small-caps, which exhibit high dividend yield and strong fundamentals. The fund charges 70 bps in fees.
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Winning Dividend ETFs to Start 2023
Dividend stocks have been beating the market for quite some months. The year 2022 as a whole could easily be attributed to the Russia-Ukraine war, red-hot inflation and rising-rate worries. While inflation started showing signs of cooling and the pace of central banks’ rate hikes slowed, the investing landscape for early 2023 has not changed much.
Dividend investing was in vogue last year amid huge volatility and uncertainty. This was especially true as dividend stocks and ETFs are major sources of consistent income for investors in any type of market though they do not offer dramatic price appreciation. These stocks tend to outperform in volatile markets and can reduce the volatility of a portfolio.
Dividend ETFs have seen more than $50 billion in inflows this year, according to GraniteShares, making it one of the most reliable and best-performing fund categories in 2022, as quoted on CNBC. Against this backdrop, below we highlight a few dividend ETFs that are rising fast in prices to start 2023.
High-dividend ETFs have been gaining more than dividend aristocrats. Since rising rates have been prevalent, investors are interested in equities that have the potential to offer capital appreciation as well as benchmark-beating yields. After all, dividends are one of the ways to ride out the turbulent times (read: 5 Cheap Dividend ETFs to Buy and Hold for 2023).
ETFs in Focus
Invesco KBW High Dividend Yield Financial ETF (KBWD - Free Report) – Up 10.5% YTD; Yields 6.69%
The underlying KBW Nasdaq Financial Sector Dividend Yield Index is a dividend-yield-weighted index seeking to reflect the performance of approximately 24 to 40 publicly listed financial companies engaged in the business of providing financial services and products, including banking, insurance and diversified financial services, in the United States. The fund has a Zacks Rank #2 (Buy).
Invesco S&P SmallCap High Dividend Low Volatility ETF (XSHD - Free Report) – Up 9.63% YTD; Yields 6.60%
The underlying S&P SmallCap 600 Low Volatility High Dividend Index comprises 60 securities in the S&P SmallCap 600 Index that have historically provided high dividend yields with lower volatility over the past 12 months. The fund charges 30 bps in fees.
Invesco KBW Premium Yield Equity REIT ETF (KBWY - Free Report) -- Up 9.34% YTD; Yields 6.79%
The underlying KBW Nasdaq Premium Yield Equity REIT Index is a dividend-weighted index seeking to reflect the performance of approximately 24 to 40 small- and mid-cap equity REITs in the United States. The fund charges 35 bps in fees.
First Trust STOXX European Select Dividend Index Fund (FDD - Free Report) – Up 8.71% YTD; Yields 5.62%
The underlying STOXX Europe Select Dividend 30 Index consists of 30 high-dividend-yielding securities selected from the STOXX Europe 600 Index. The fund charges 58 bps in fees.
WBI Power Factor High Dividend ETF (WBIY - Free Report) – Up 8.10% YTD; Yields 4.08%
The underlying Solactive Power Factor High Dividend Index tracks the performance of 50 U.S.-listed stocks among large, mid and small-caps, which exhibit high dividend yield and strong fundamentals. The fund charges 70 bps in fees.