5 Dividend ETF Winners of 2025 That Breezed Past the S&P 500

Market Performance - Wall Street ended 2025 positively, with the S&P 500 gaining 16.39%, marking its third consecutive year of double-digit gains [1] - The Nasdaq Composite surged 20.36% due to ongoing enthusiasm for artificial intelligence (AI), while the Dow Jones increased by 12.97%, impacted by its limited exposure to technology stocks [1] Market Recovery - The strong year-end performance indicates a recovery from a significant sell-off at the beginning of 2025, which was driven by low-cost AI initiatives from China, Trump tariffs, persistent inflation, and high interest rates [2] - In April 2025, the S&P 500 had dropped nearly 19% from its February peak, briefly falling below the 5,000 mark, narrowly avoiding bear-market territory [3] Economic Factors - Market stability returned in May after a turbulent April, which was marked by tariff-related issues [2] - The Federal Reserve implemented three rate cuts in 2025, starting in September, but momentum was disrupted by a prolonged U.S. government shutdown and concerns over AI overvaluation [4] Year-End Trends - The anticipated "Santa Claus" rally did not materialize, as the final trading days of 2025 were characterized by profit-taking, reflecting investor caution regarding AI overvaluation and related concerns [5] Dividend ETFs - In a volatile market, dividend ETFs have become attractive, as investors seek income amidst uncertainty [6] - Not all dividend stocks serve the same purpose; high-yield stocks provide current income, while those with dividend growth indicate quality investing [7] Top Performing Dividend ETFs - First Trust STOXX European Select Dividend ETF (FDD) increased by 56.1%, with an annual yield of 3.99% [9] - iShares International Select Dividend ETF (IDV) rose by 44.2% [10] - WisdomTree International High Dividend ETF (DTH) gained 37.3%, yielding 3.80% annually [13] - First Trust Dow Jones Global Select Dividend ETF (FGD) increased by 36%, with a yield of 5.62% [14] - SPDR S&P International Dividend ETF (DWX) rose by 26.1%, yielding 4.44% annually [15]