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Dividend stocks have been beating the market for quite some months. The S&P 500 is up 5.4% this year and has lost about 6.5% past year. However, the highest gain from the U.S. dividend space came from WisdomTree US Smallcap Quality Dividend Growth Fund (DGRS - Free Report) (up 11.2%), while the highest return offered by the space was 6% past year from ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL - Free Report) .
The year 2022 was all about the Russia-Ukraine war, red-hot inflation and rising rates. Although 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. We have seen a bear market rally this year, but occasional releases of upbeat economic data points amid still-high inflation triggered bets for further hawkish Fed actions.
Dividend investing has been in vogue 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.
Both dividend aristocrats and high-dividend ETFs have gained strength so far this year. 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 decent current income. After all, dividends are one of the ways to ride out turbulent times.
Against this backdrop, below, we highlight a few dividend ETFs that are rising fast in prices to start 2023. These ETFs have beaten the broader market with ease.
ETFs in Focus
WisdomTree US Smallcap Quality Dividend Growth Fund (DGRS - Free Report) – Up 11.2% YTD; Yields 2.61% Annually
The underlying WisdomTree U.S. SmallCap Quality Dividend Growth Index is a fundamentally weighted index that consists of the small-capitalization segment of dividend-paying stocks with growth characteristics.
First Trust SMID Cap Rising Dividend Achievers ETF (SDVY - Free Report) – Up 9.9% YTD; Yields 2.06% Annually
The underlying NASDAQ US Small Mid Cap Rising Dividend Achievers Index is composed of the securities of 100 small and mid-cap companies with a history of raising their dividends that exhibit the characteristics to continue to do so in the future. The fund charges 60 bps in fees.
WisdomTree Europe SmallCap Dividend Fund (DFE - Free Report) – Up 9.6% YTD; Yields 5.26% Annually
The underlying WisdomTree Europe SmallCap Dividend Index is a fundamentally weighted index that measures the performance of the small-capitalization segment of the European dividend-paying market. The fund charges 58 bps in fees.
WisdomTree U.S. SmallCap Dividend Fund (DES - Free Report) – Up 8.8% YTD; Yields 2.63% Annually
The underlying WisdomTree U.S. SmallCap Dividend Index is a fundamentally weighted index measuring the performance of the small-capitalization segment of the U.S. dividend-paying market. The fund charges 38 bps in fees.
Invesco KBW High Dividend Yield Financial ETF (KBWD - Free Report) – Up 8.6% YTD; Yields 10.52% Annually
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’s expense ratio is 3.84% annually.
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Winning Dividend ETFs So Far in First Quarter
Dividend stocks have been beating the market for quite some months. The S&P 500 is up 5.4% this year and has lost about 6.5% past year. However, the highest gain from the U.S. dividend space came from WisdomTree US Smallcap Quality Dividend Growth Fund (DGRS - Free Report) (up 11.2%), while the highest return offered by the space was 6% past year from ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL - Free Report) .
The year 2022 was all about the Russia-Ukraine war, red-hot inflation and rising rates. Although 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. We have seen a bear market rally this year, but occasional releases of upbeat economic data points amid still-high inflation triggered bets for further hawkish Fed actions.
Dividend investing has been in vogue 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.
Both dividend aristocrats and high-dividend ETFs have gained strength so far this year. 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 decent current income. After all, dividends are one of the ways to ride out turbulent times.
Against this backdrop, below, we highlight a few dividend ETFs that are rising fast in prices to start 2023. These ETFs have beaten the broader market with ease.
ETFs in Focus
WisdomTree US Smallcap Quality Dividend Growth Fund (DGRS - Free Report) – Up 11.2% YTD; Yields 2.61% Annually
The underlying WisdomTree U.S. SmallCap Quality Dividend Growth Index is a fundamentally weighted index that consists of the small-capitalization segment of dividend-paying stocks with growth characteristics.
First Trust SMID Cap Rising Dividend Achievers ETF (SDVY - Free Report) – Up 9.9% YTD; Yields 2.06% Annually
The underlying NASDAQ US Small Mid Cap Rising Dividend Achievers Index is composed of the securities of 100 small and mid-cap companies with a history of raising their dividends that exhibit the characteristics to continue to do so in the future. The fund charges 60 bps in fees.
WisdomTree Europe SmallCap Dividend Fund (DFE - Free Report) – Up 9.6% YTD; Yields 5.26% Annually
The underlying WisdomTree Europe SmallCap Dividend Index is a fundamentally weighted index that measures the performance of the small-capitalization segment of the European dividend-paying market. The fund charges 58 bps in fees.
WisdomTree U.S. SmallCap Dividend Fund (DES - Free Report) – Up 8.8% YTD; Yields 2.63% Annually
The underlying WisdomTree U.S. SmallCap Dividend Index is a fundamentally weighted index measuring the performance of the small-capitalization segment of the U.S. dividend-paying market. The fund charges 38 bps in fees.
Invesco KBW High Dividend Yield Financial ETF (KBWD - Free Report) – Up 8.6% YTD; Yields 10.52% Annually
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’s expense ratio is 3.84% annually.