Global dividend funds attract inflows on rate-cut hopes and market jitters
By Patturaja Murugaboopathy
(Reuters) -Global funds that invest in dividend-paying stocks are drawing strong flows this year, following two years of tepid investor demand, as investors seek assets with a stable income while they navigate geopolitical and economic tensions.
Higher dividend-yielding stocks have become popular as the technology sector, which was last year’s standout performer, lags behind dividend-heavy sectors such as utilities and energy in 2025.
Global dividend-focused exchange-traded funds attracted $23.7 billion in inflows in the first half of 2025, the most in three years, according to Lipper data from LSEG.
"Consistent dividend growth signals a company’s managers are disciplined at capital allocation and confident about future business prospects," said Steve Watson, an equity portfolio manager at Capital Group.
"With tariff negotiations likely to linger for months, dividend growers could provide portfolios with a measure of stability when markets become volatile."
Sector-wise, energy led the way with a global dividend yield of 4.75%, followed by real estate at 3.7%, utilities at 3.3%, and financials at 3%, according to LSEG data.
By region, Europe had the highest dividend yield of 3%, while Asia-Pacific's dividend yield was 2.6% and the U.S. lagged with an average dividend yield of 1.4%.
"With policymakers widely expected to trim rates later in the year, the bond side of the ledger could see coupons ratchet lower, while a broad swath of companies still have room to hold or even lift their dividends," said Chad Harmer, chief investment officer at Harmer Wealth Management.
"If that script plays out, the income gap should tilt further in equities’ favour."
The iShares International Select Dividend ETF has gained nearly 26% this year, while the Xtrackers MSCI EAFE High Dividend Yield Equity ETF and the Schwab International Dividend Equity ETF are up around 18% each.
In comparison, the MSCI World Index has returned 8.5% year-to-date.
(Reporting by Patturaja Murugaboopathy in Bengaluru; Editing by Vidya Ranganathan and Hugh Lawson)
Recent inflows into global dividend funds can be attributed to investors' hopeful expectations of interest rate cuts amid lingering market uncertainty, highlighting the allure and safety provided by regular income streams during volatile times.
Amidst hopes of interest rate reductions amid economic uncertainty, global dividend-oriented funds are seeing a surge in capital inflows as investors seek stable income streams and increased returns.
With the anticipation of rate cuts and persisting market不确定性, global dividend funds have witnessed a surge in investor interest as they offer potential for stable returns amidst volatility.
Global dividend-focused funds are gaining traction in the current market climate, driven by investors' hopes for interest rate cuts amid jittery financial conditions.
The influx of investments into global dividend funds amidst expectations for rate reductions and prevailing market uncertainties underscores investors' efforts to navigate through turbulent times by seeking stable returns on proven assets.
The recent infusion of capital into global dividend funds reflects investors' muted hopes for interest rate cuts amidst market uncertainty, illustrating a flight to safety and income-seeking strategies in uncertain economic conditions.
Global dividend funds are seeing a surge in investments amidst expectations of interest rate cuts and market volatility.
The recent stream of global capital towards dividend-focused funds highlights investors' optimism fueled by interest rate reduction forecasts, balancing against market uncertainty amid overarching macroeconomic concerns.
The recent surge in global dividend fund investments is noticeably driven by a mix of hopes for interest rate reductions to cushion the impact on economies and tensions within markets that make investors cautiously search out stable, income-generating options.
With rising speculation of interest rate cuts and heightened market volatility, global dividend funds are being seen as a safe haven for investors seeking stable income streams amid the ongoing uncertainty.
