Among the top performing ETFs is the WisdomTree U.S. High Dividend Fund (DHS), which has returned 2.8% this year as it lured $406 million. The biggest winner for flows, the Schwab U.S. Dividend Equity ETF (SCHD), has attracted almost $12 billion even as it lost 8.5%.
That compares to a roughly 18% loss for the S&P 500, which is being beaten by almost all major dividend ETFs, every one of which has posted a net inflow this year so far.
The counterpoint: With interest rates now 300 basis points higher than at the start of the year, the argument is that bonds now offer a more dependable source of income. Rates on three-month Treasury bills are hovering near 3.9%, the highest since 2007.
“Do you really wanna buy stocks for the dividends when now you can get these interest rates on bonds?” said David Bianco, Americas CIO at DWS Group. “If the income is what you want, then go to where the income is reliable.”
This article was provided by Bloomberg News.