U.S. Dividend ETFs Facing Poor Returns and Capital Outflows
U.S. dividend-focused Exchange Traded Funds (ETFs) are experiencing a decline in returns, prompting a significant withdrawal of funds by investors. A prominent example is the 'TIGER U.S. Dividend Dow Jones,' which has seen a return of only 0.62% year-to-date, resulting in an outflow of 50.8 billion won. This underperformance stands starkly against the robust 13.06% return of the S&P 500, primarily attributed to weaknesses in healthcare, energy, and consumer sectors, along with being sidelined from the AI rally.
In the past month alone, this trend has persisted with approximately 91.6 billion won in net sales from four major U.S. dividend ETFs. This is largely due to investors shifting their focus towards AI-related stocks and the limited growth potential in traditional dividend stocks. As investors continue to reallocate their capital to big-tech firms instead of slow-growth dividend stocks, this trend is likely to persist in the foreseeable future. Ultimately, this situation suggests that dividend-centric ETFs need to explore more diversified investment approaches.
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