Dividend ETFs Underperform Broader Market Despite Expectations of Safe Haven
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Dividend ETFs like DVY, SDY, and SCHD have underperformed the broader market in 2023, contrary to expectations they would provide shelter.
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The funds are overweight utilities, financials and other value stocks that have struggled as tech and growth stocks surged.
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Dividend strategies often have a value stock bias, causing them to lag during growth-driven markets.
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Investor demand for dividend funds has slowed, with only $786 million flowing into the sector this year.
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Meanwhile bonds are providing reliable income streams, presenting stiff competition for dividend funds.