This ETF Could Be a 2026 Winner

Core Insights - Dividend-focused ETFs are expected to underperform the S&P 500 in 2025, primarily due to investor interest in mega-cap technology stocks, which typically do not offer high yields [1][2]. Performance of OUSA - The ALPS O'Shares U.S. Quality Dividend ETF (OUSA) is anticipated to have a solid performance in 2025, although it will lag behind the broader market [4]. - OUSA has a dividend yield of 1.37%, indicating potential for payout growth without being overly reliant on high-risk yield traps [3][6]. Market Dynamics - The current market is heavily weighted towards technology stocks, particularly those involved in artificial intelligence (AI), which has impacted the performance of dividend-focused investments [5]. - OUSA allocates approximately 23% of its portfolio to technology stocks, positioning it to benefit from the AI trend while maintaining a quality investment profile [5]. Corporate Behavior - Companies are increasingly favoring share buybacks over dividends, with an estimated $1 trillion allocated to buybacks compared to $750 billion for dividends in 2025 [7]. - OUSA's portfolio consists of companies committed to increasing their dividend payouts, which is a favorable characteristic in the current market environment [6].