At a glance
- Several AI-oriented companies have paid dividends for years, while others pay nothing or nominal amounts.
- For advisors assembling income sleeves, a dividend fund chosen as ballast may repeat AI exposure already held in a growth allocation.
- Vanguard Dividend Appreciation ETF VIG exemplifies the growth approach, requiring holdings to show a sustained record of raising payouts.
Some AI stocks rank among the largest holdings in dividend-focused ETFs, according to Morningstar — Financial Advice. Several AI-oriented companies have paid dividends for years, while others pay nothing or nominal amounts.
For advisors assembling income sleeves, a dividend fund chosen as ballast may repeat AI exposure already held in a growth allocation. Morningstar found that dividend funds may not hedge a stumble in the AI trade.
Vanguard Dividend Appreciation ETF VIG exemplifies the growth approach, requiring holdings to show a sustained record of raising payouts. Vanguard High Dividend Yield ETF VYM and State Street SPDR S&P Dividend ETF SDY represent the yield side. SDY weights eligible stocks by annual dividend yield.
Schwab U.S. Dividend Equity ETF SCHD and Fidelity High Dividend ETF FDVV blend both tests and still yield more than the market, according to Morningstar. The Schwab fund leans toward mature companies and away from tech stocks with short dividend histories.
Reported by the Products & portfolios desk from Morningstar — Financial Advice. Published . Corrections