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The Zacks Analyst Blog Highlights Invesco High Yield Equity Dividend Achievers ETF, Invesco KBW High Dividend Yield Financial ETF, Global X SuperDividend U.S. ETF, First Trust Morningstar Dividend Leaders ETF and Invesco BulletShares 2024 High Yield
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For Immediate Release
Chicago, IL – August 16, 2023 – Zacks.com announces the list of stocks and featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. ETFs recently featured in the blog include: Invesco High Yield Equity Dividend Achievers ETF (PEY - Free Report) , Invesco KBW High Dividend Yield Financial ETF (KBWD - Free Report) , Global X SuperDividend U.S. ETF (DIV - Free Report) , First Trust Morningstar Dividend Leaders ETF (FDL - Free Report) and Invesco BulletShares 2024 High Yield Corporate Bond ETF (BSJO - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
5 High-Dividend ETFs Beating the S&P in the Past Month
While the stock market has recorded an incredible rally in 2023, exceeding all expectations, there are valid reasons to approach the current situation with caution. The excitement for AI, the concentration of stocks in a few firms and still-present inflationary pressure indicate potential bubbles (read: Is the Stocks' Bull Run Coming to an End? ETFs to Gain).
There are growing concerns among analysts that this bullish run might be at risk as the market approaches new highs. JPMorgan's top quant strategist, Marko Kolanovic, has raised concerns about the hype surrounding artificial intelligence which is likely to take longer time to get materialized, per various sources. Investors should be cautious about the risks posed by an AI-fueled bubble, as it could be vulnerable to headwinds.
Moreover, although inflation has cooled from its highs last year, there is still a significant risk that it could rebound due to lingering economic pressures, such as rising oil prices on geopolitical concerns and still-strong labor market. If inflation rises again and interest rates increase, the sectors that have been driving the current stock market rally might experience pullbacks.
If this was not enough, Moody's recent credit rating downgrade of some smaller U.S. banks has sent ripples through the broader market. The downgrade comes as these financial institutions grapple with a complex mix of challenges, from interest rate volatility to asset-liability management risks. In any case, failure of three regional banks in early 2023 has brought the crisis forward this year (read: Moody's Downgrade 10 U.S. Banks: ETF Strategies to Play).
Why High-Dividend ETFs Are Good Bets
High dividend ETFs can be a good investment during times of economic uncertainty, as they provide a steady source of income regardless of market conditions. These types of stocks and ETFs typically pay out a higher percentage of their profits as dividends than other stocks, which means that they can make up for the capital losses, if there is any.
ETFs in Focus
Against this backdrop, below we highlight a few high-dividend ETFs that yields higher than the benchmark U.S. treasury yield (4.16%) as of Aug 11, 2023. These funds outperformed the S&P 500 index (down 0.9%).
Invesco High Yield Equity Dividend Achievers ETF – Yield 4.22%; One Month Gain: Up 7.00%
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 fund charges 52 bps in fees.
Invesco KBW High Dividend Yield Financial ETF – Yield 11.11%; One Month Gain: Up 3.0%
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 expense ratio of the fund is 3.84%.
Global X SuperDividend U.S. ETF – Yield 7.30%; One Month Gain: Up 2.2%
The underlying INDXX SuperDividend U.S. Low Volatility Index tracks the performance of 50 equally weighted common stocks, MLPs & REITs that rank among the highest dividend yielding equity securities in the United States. The fund charges 45 bps in fees.
First Trust Morningstar Dividend Leaders ETF – Yield 4.45%; One Month Gain: Up 2.6%
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. The fund charges 45 bps in fees.
Invesco BulletShares 2024 High Yield Corporate Bond ETF – Yield 5.84%; One Month Gain: Up 0.8%
The underlying Nasdaq Bulletshares USD High Yield Corporate Bond 2024 Index represents the performance of a held-to-maturity portfolio of US dollar-denominated, high yield corporate bonds with effective maturities in 2024. The fund charges 42 bps in fees.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights Invesco High Yield Equity Dividend Achievers ETF, Invesco KBW High Dividend Yield Financial ETF, Global X SuperDividend U.S. ETF, First Trust Morningstar Dividend Leaders ETF and Invesco BulletShares 2024 High Yield
For Immediate Release
Chicago, IL – August 16, 2023 – Zacks.com announces the list of stocks and featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. ETFs recently featured in the blog include: Invesco High Yield Equity Dividend Achievers ETF (PEY - Free Report) , Invesco KBW High Dividend Yield Financial ETF (KBWD - Free Report) , Global X SuperDividend U.S. ETF (DIV - Free Report) , First Trust Morningstar Dividend Leaders ETF (FDL - Free Report) and Invesco BulletShares 2024 High Yield Corporate Bond ETF (BSJO - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
5 High-Dividend ETFs Beating the S&P in the Past Month
While the stock market has recorded an incredible rally in 2023, exceeding all expectations, there are valid reasons to approach the current situation with caution. The excitement for AI, the concentration of stocks in a few firms and still-present inflationary pressure indicate potential bubbles (read: Is the Stocks' Bull Run Coming to an End? ETFs to Gain).
There are growing concerns among analysts that this bullish run might be at risk as the market approaches new highs. JPMorgan's top quant strategist, Marko Kolanovic, has raised concerns about the hype surrounding artificial intelligence which is likely to take longer time to get materialized, per various sources. Investors should be cautious about the risks posed by an AI-fueled bubble, as it could be vulnerable to headwinds.
Moreover, although inflation has cooled from its highs last year, there is still a significant risk that it could rebound due to lingering economic pressures, such as rising oil prices on geopolitical concerns and still-strong labor market. If inflation rises again and interest rates increase, the sectors that have been driving the current stock market rally might experience pullbacks.
If this was not enough, Moody's recent credit rating downgrade of some smaller U.S. banks has sent ripples through the broader market. The downgrade comes as these financial institutions grapple with a complex mix of challenges, from interest rate volatility to asset-liability management risks. In any case, failure of three regional banks in early 2023 has brought the crisis forward this year (read: Moody's Downgrade 10 U.S. Banks: ETF Strategies to Play).
Why High-Dividend ETFs Are Good Bets
High dividend ETFs can be a good investment during times of economic uncertainty, as they provide a steady source of income regardless of market conditions. These types of stocks and ETFs typically pay out a higher percentage of their profits as dividends than other stocks, which means that they can make up for the capital losses, if there is any.
ETFs in Focus
Against this backdrop, below we highlight a few high-dividend ETFs that yields higher than the benchmark U.S. treasury yield (4.16%) as of Aug 11, 2023. These funds outperformed the S&P 500 index (down 0.9%).
Invesco High Yield Equity Dividend Achievers ETF – Yield 4.22%; One Month Gain: Up 7.00%
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 fund charges 52 bps in fees.
Invesco KBW High Dividend Yield Financial ETF – Yield 11.11%; One Month Gain: Up 3.0%
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 expense ratio of the fund is 3.84%.
Global X SuperDividend U.S. ETF – Yield 7.30%; One Month Gain: Up 2.2%
The underlying INDXX SuperDividend U.S. Low Volatility Index tracks the performance of 50 equally weighted common stocks, MLPs & REITs that rank among the highest dividend yielding equity securities in the United States. The fund charges 45 bps in fees.
First Trust Morningstar Dividend Leaders ETF – Yield 4.45%; One Month Gain: Up 2.6%
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. The fund charges 45 bps in fees.
Invesco BulletShares 2024 High Yield Corporate Bond ETF – Yield 5.84%; One Month Gain: Up 0.8%
The underlying Nasdaq Bulletshares USD High Yield Corporate Bond 2024 Index represents the performance of a held-to-maturity portfolio of US dollar-denominated, high yield corporate bonds with effective maturities in 2024. The fund charges 42 bps in fees.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.