Best-Performing Dividend ETFs of the First Nine Months of 2024
Wall Street delivered a solid rally in the first nine months of 2024. The S&P 500 has advanced 20.3%, the Dow Jones has gained 12.3% and the Nasdaq Composite has added 20.7%. The artificial intelligence (AI) craze and the Fed rate-cut optimism have been the major driving factors amid recession fears, geopolitical tensions and the occasional sell-off in tech stocks that weighed on investors’ confidence.
A robust GDP report and easing inflation fueled further Fed rate cut optimism. The Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation measure, showed a 0.1% month-over-month increase in the core PCE, undershooting Wall Street's expectations.
Gold has been on a solid ascent, hitting a series of new highs driven by the Fed rate cut optimism, a likelihood of falling greenback, strong physical buying from central banks and the Middle East geopolitical tensions, which raised the appeal for gold as a store of wealth.
The wave of policy easing has been noticed everywhere. The European Central Bank (ECB) enacted two rate cuts this year. Several other central banks also followed the same path. China launched massive economic stimulus.
Were There Any Worries?
Wall Street wobbled occasionally. There has been an upheaval in technology stocks as many apprehended as massive investments in AI stocks will take longer to pay off. The manufacturing sector is also under pressure. The U.S. labor market, too, is showing signs of slight cooling. There has been geopolitical tensions and global growth worries (read: Tap Dividend ETFs as Wall Street Wobbles).
Power of Dividend ETFs
Dividend-paying stocks provide a steady income stream and help mitigate potential losses during weaker market periods. These stocks offer the best of both worlds — safety in the form of payouts and stability in the form of mature companies that are less volatile to the large swings in stock prices.
High-dividend stocks and exchange-traded funds (ETFs) can be good investments 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 are any.
Meanwhile, high-quality dividend stocks with a history of consistent dividend payments and growth can offer both income and the potential for capital appreciation over the long term.
Top-Performing Dividend ETFs in Focus
Against this backdrop, below we highlight a few winning dividend-focused exchange-traded funds (ETFs) that topped/almost returned the same as the S&P 500 (up 20.9%) in the first nine months of 2024 (as of Sept. 27, 2024).
First Trust NASDAQ Technology Dividend Index Fund (TDIV) – Up 27.5%; Yields 1.56% annually
VanEck Energy Income ETF (EINC) – Up 23.3%; Yields 1.19% annually
Capital Group Dividend Value ETF (CGDV) – Up 22.9%; Yields 1.08% annually
AB US High Dividend ETF (HIDV) – Up 21.4%; Yields 2.29% annually
FlexShares Quality Dividend Defensive Index Fund (QDEF) – Up 20.6%; Yields 1.85% annually
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FlexShares Quality Dividend Defensive ETF (QDEF): ETF Research Reports
VanEck Energy Income ETF (EINC): ETF Research Reports
Capital Group Dividend Value ETF (CGDV): ETF Research Reports