- Dividend income has always been popular with stock market investors, especially older investors seeking yield.
- The recent correction in the technology-led market, and new forms of bond risk rising from President Trump’s economic policy, may place even more focus on yield from dividend stocks.
For many investors, it’s always a good time for dividend stocks, with the income component coming to shareholders from the cash flow of corporations providing peace of mind regardless of short-term ups and downs in stock prices. But now, as the stock and bond markets both see sharp spikes in volatility, dividend stocks may appeal to an even wider group of investors, playing more of a role in-between equities growth and yield.
There are now over 100 exchange-traded funds focused on dividend stocks, according to ETF Action, though the vast majority of assets are concentrated in the biggest index fund ones, including Vanguard Dividend Appreciation ETF (VIG), Schwab US Dividend Equity ETF (SCHD), and iShares Core Dividend Growth ETF (DGRO).
Top 5 dividend ETFs, by total assets under management
- Vanguard Dividend Appreciation ETF: $81 billion
- Schwab U.S. Dividend Equity ETF: $65 billion
- Vanguard High Dividend Yield Index ETF: $54 billion
- iShares Core Dividend Growth ETF: $28 billion
- SPDR S&P Dividend ETF: $19 billion
Source: ETFAction.com
As the actively managed ETF space continues to grow, there are a growing number of actively managed dividend ETFs, such as the T. Rowe Dividend Growth ETF (TDVG), with the managers betting that they can identify higher-quality dividend payers that generate a better mix of capital appreciation and yield.
TDVG was one of the first ETFs that T. Rowe Price, which is known for its traditional mutual funds, launched in 2020. The company now has 19 ETFs in all and $13 billion in ETF assets. The dividend ETF has over $700 million in assets.
Source: https://www.cnbc.com/2025/04/27/why-dividend-stocks-bonds-volatile-market.html