The iShares Core High Dividend ETF (HDV) leads high-yield funds in 2026 performance as dividend investing reverses its decade-long trend.
The iShares Core High Dividend ETF (HDV) has outperformed the S&P 500 year to date in 2026, marking a reversal of a decade-long trend where dividend investing trailed growth. HDV returned 20% over the same period, surpassing the S&P 500's 13% return. The fund utilizes a quality-screened approach, filtering for economic moats and financial health to select 75 U.S. equities. This performance highlights a rotation into defensive sectors like utilities, energy, and healthcare. While HDV offers a low expense ratio and high yield, other funds like the First Trust Morningstar Dividend Leaders Index Fund (FDL) and the WisdomTree U.S. Total Dividend Fund (DTD) also show strong results. FDL weights holdings by the dollar amount of dividends paid, while DTD includes mega-cap tech names like Microsoft and NVIDIA. Investors seeking high yield with a few growth risks are finding dividend cash flows more attractive as market valuation multiples at the top remain stretched.