Rising Investor Focus on Dividend and Equal-Weighted ETFs
Amidst increasing volatility in global stock markets, investors are shifting their focus from high-volatility stocks like Nvidia and Tesla to dividend ETFs that promise more stable returns. The most popular ETF among investors recently is 'SCHD,' which focuses on financials, healthcare, and consumer staples, boasting a high dividend yield. Notably, SCHD provides quarterly dividends in March, June, September, and December, recording a dividend yield of approximately 3.5% over the past year. Furthermore, plans for a 3-for-1 stock split are underway to enhance liquidity.
Equally weighted ETFs, which hold the same weight in all S&P500 index components, are also garnering attention from investors. As the price volatility of major tech companies increases, the defensive strengths of such ETFs have become appealing, particularly the Invesco S&P500 Equal Weight (RSP) ETF, which saw net inflows of $2.553 billion. This ETF has attracted investors looking to mitigate concentration in tech stocks and has outperformed traditional S&P500-tracking ETFs in the first half of the year. As interest in previously undervalued stocks grows, the potential for further investment in equal-weighted ETFs becomes more pronounced, suggesting a shift in investor strategies.
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